Mussenden Corporation Has an Activity-Based Costing System with Three Activity

question 93

Multiple Choice

Mussenden Corporation has an activity-based costing system with three activity cost pools-Machining, Order Filling, and Other.In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to three activity cost pools based on resource consumption.Data used in the first stage allocations follow: 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 for the company's two products follow: The activity rate for the Order Filling activity cost pool under activity-based costing is closest to:

• A)$2.86 per order
• B)$49.00 per order
• C)$5.10 per order
• D)$2.00 per order

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Definitions:

Ex-rights Date

The ex-rights date is the first trading day when the buyer of a stock is not entitled to receive a previously declared rights offering, often leading to a decrease in the stock's price.

Venture Capital

Venture capital is financing provided to startups and small businesses with strong growth potential by investors seeking high returns.

Investments

Assets or items that an individual or entity purchases with the expectation that it will generate income or appreciate in value over time.