Escher Company Is a Wholesale Distributor That Uses Activity-Based Costing

question 7

Multiple Choice

Escher 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: 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:
-What would be the total overhead cost per order according to the activity based costing system? In other words,what would be the overall activity rate for the filling orders activity cost pool? (Round to the nearest whole cent. )

• A)$54.00
• B)$63.00
• C)$58.50
• D)$56.50

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Definitions:

Fair Value Adjustments

Modifications made to the reported value of assets or liabilities to reflect their actual market value.

Business Combination

This occurs when two or more businesses come together to form a single company, often through acquisitions or mergers.

Recording Method

A system or standard procedure for capturing financial transactions and events in an organization's accounting records.

Unrecorded Liability

A liability that has not been accounted for or documented in the financial statements.