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

question 127

Multiple Choice

Lehner Corporation has provided the following data from its activity-based costing accounting system: Distribution of Resource Consumption across Activity Cost Pools:
Activity Cost Pools The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.

-How much indirect factory wages and factory equipment depreciation cost would be assigned to the Customer Orders activity cost pool?

• A)$247,000
• B)$390,000
• C)$214,500
• D)$780,000

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Definitions:

Process Cost System

An accounting method used to track costs in manufacturing environments where products are indistinguishable from each other and produced in a continuous flow.

Custom Cabinet

A storage unit designed and built to meet the specific dimensions and style preferences of a customer.

Paper Mill

A factory that produces paper and paper products from raw materials such as wood pulp.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production based on a certain activity base.