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

question 9

Multiple Choice

Eschbach 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 customer according to the activity based costing system? In other words, what would be the overall activity rate for the customer support activity cost pool? (Round to the nearest whole dollar.)

• A) $4,760
• B) $5,600
• C) $4,340
• D) $3,920

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Definitions:

Computer System

is an integrated set of hardware and software designed to process data and produce output.

Office Workers

Individuals employed in a primarily clerical or administrative capacity, working within an office environment.

Communism

A political and economic ideology advocating for a classless society in which property and the means of production are owned communally, and each person works and is remunerated according to their abilities and needs.

Division of Labor

The allocation of different parts of a manufacturing process or task to different people to improve efficiency and productivity.