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

question 98

Multiple Choice

Ormond 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, $6,800; Order Filling, $10,700; and Other, $4,500. 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 Machining activity cost pool under activity-based costing is closest to:

• A)$0.32 per MH
• B)$1.25 per MH
• C)$1.10 per MH
• D)$0.34 per MH

---

Definitions:

Expert Power

A form of power that is derived from possessing knowledge, skills, or expertise in a particular area that others need or value.

Referent Power

A form of influence derived from the admiration or respect one has for the influencer, compelling others to follow based on liking or aspiring to be like the person.

Personal Appeals

Requests to cooperate on the basis of friendship or as a personal favor.

Inspirational Appeals

The use of emotions to raise enthusiasm for the task by appealing to the values and ideals of others.