Reference no: EM132551055
Escoto Company is a wholesale distributor that uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity-based costing system:
Overhead costs:
Wages and salaries$540,000
Other expenses200,000
Total$740,000
Distribution of Resource Consumption:
Activity Cost Pools Filling Orders Customer Support Other Total
Wages and salaries 10% 80% 10% 100%
Other expenses 20% 60% 20% 100%
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows:
Activity Cost Pool Activity
Filling orders4,000 orders
Customer support40 customers
Question 1 : What would be the total overhead cost per order according to the activity-based costing system, rounded to the nearest whole cent? In other words, what would be the overall activity rate for the Filling Orders activity cost pool?
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