Goertz Corporation Has an Activity-Based Costing System with Three Activity

question 128

Multiple Choice

Goertz Corporation has an activity-based costing system with three activity cost pools--Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Distribution of Resource Consumption Across Activity Cost Pools:
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 for the company's two products follow:
Activity:
Finally, the costs of Machining and Order Filling are combined with the following sales and direct cost data to determine product margins.
Sales and Direct Cost Data:
The activity rate for the Order Filling activity cost pool under activity-based costing is closest to:

• A) $3.33 per order
• B) $3.00 per order
• C) $54.00 per order
• D) $6.00 per order

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Definitions:

Prospective Memory

Memory to perform an act in the future, as at a certain time or when a certain event occurs.

Declarative Nature

The quality of being explicit or clear in expression, often used in the context of statements or propositions that convey information straightforwardly.

Hippocampus

A major component of the brain that plays critical roles in the consolidation of information from short-term memory to long-term memory and spatial memory.

Hypothalamus

A small region at the base of the brain responsible for hormone production and regulation of important bodily functions like temperature and hunger.