Stormer Corporation Has Provided the Following Data from Its Activity-Based

question 23

Essay

Stormer Corporation has provided the following data from its activity-based costing accounting system:
Indirect factory wages $27,000
Factory equipment depreciation $243,000
Distribution of resource consumption across Activity Cost Pools:
$$\begin{array} { l l l l l } & \text { Customer } & \text { Product } & \\& \text { Orders } & \text { Processing } & \text { Other } & \text { Total } \\\hline \text { Indirect factor wages } & 27 \% & 68 \% & 5 \% & 100 \% \\\text { Factory equipment depreciation } & 20 \% & 67 \% & 13 \% & 100 \%\end{array}$$ The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.
Required:
a. Determine the total amount of indirect factory wages and factory equipment depreciation costs that would be allocated to the Product Processing activity cost pool. Show your work!
b. Determine the total amount of indirect factory wages and factory equipment depreciation costs that would NOT be assigned to products. Show your work!

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Definitions:

Efficient Market Hypothesis

The theory that it is impossible to "beat the market" because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information.

Weakly Efficient

A term referring to a form of market efficiency where all past trading information is fully reflected in stock prices, but future and private information may not be.

Mutual Funds

Investment programs funded by shareholders that trade in diversified holdings and are professionally managed, allowing investors access to a broad spectrum of investments.

Insiders

Individuals within a corporation who have access to private, non-public information which might influence the company's stock price.