Orzel Corporation Has Provided the Following Data Concerning Its Overhead

question 5

Multiple Choice

Orzel Corporation has provided the following data concerning its overhead costs for the coming year: The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year: The Other activity cost pool does not have a measure of activity;it is used to accumulate costs of idle capacity and organization-sustaining costs. The distribution of resource consumption across activity cost pools is given below: The activity rate for the Assembly activity cost pool is closest to:

• A)$2.70 per labor-hour
• B)$9.00 per labor-hour
• C)$9.90 per labor-hour
• D)$16.20 per labor-hour

---

Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to update the accounting records for expenses and revenues not fully recorded during the period.

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future, recognized as assets on the balance sheet until they are incurred.

Economic Value

The worth of a good or service determined by its ability to satisfy needs or wants, as well as its scarcity and utility.

Future Economic

Future economic refers to projections or expectations about economic conditions and their effects on investment, spending, and economic growth in the future.