Reck Corporation Uses Activity-Based Costing to Assign Overhead Costs to Products

question 170

Multiple Choice

Reck Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been allocated to the company's three activity cost pools as follows: Machining, $11,700; Order Filling, $17,800; and Other, $13,500. Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data appear below: The activity rate for the Order Filling activity cost pool under activity-based costing is closest to:

• A) $43.00 per order
• B) $7.50 per order
• C) $6.00 per order
• D) $17.80 per order

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Definitions:

Surface Waters

Water that collects on the surface of the ground, including lakes, rivers, and ponds, as opposed to groundwater.

National Effluent Standards

Regulations set by a country to control the discharge of pollutants from industrial sites into water bodies to protect environmental and public health.

Affected Industry

An economic sector or industry that experiences direct impacts, either positive or negative, as a result of specific policy actions, market conditions, or technological changes.

U.S. Army Corps

A federal agency within the Department of Defense responsible for military engineering and environmental management, including the construction and maintenance of infrastructure and flood protection.