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:

Brutus

Brutus was a pseudonym used by one of the Anti-Federalists during the American founding period who wrote essays critical of the proposed U.S. Constitution, arguing for stronger protections for states' rights and individual freedoms.

Federal Farmer

A pseudonym used by an anti-federalist writer who published a series of essays critical of the proposed Constitution of the United States.

Pseudonyms

Fictitious names used by authors, performers, and other public figures to conceal their identity.

Interstate Commerce

Interstate commerce refers to the purchase, sale, or exchange of commodities, transportation of people, money or goods, and navigation of waters between different states.