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

question 5

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:
-To the nearest whole dollar, how much wages and salaries cost would be allocated to a customer who made 6 orders in a year?

• A) $2,739
• B) $3,287
• C) $4,382
• D) $2,191

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Definitions:

General Partnership

A business structure where two or more individuals own and operate a business together, sharing profits and liabilities equally or according to their agreement.

Partnership Agreement

A legal document that outlines the rights, responsibilities, and profit-sharing among business partners.

Partnership Debts

Liabilities or financial obligations incurred by a partnership in the course of its business activities.

Limited Liability

This refers to a business structure where the owners' personal assets are protected from company debts and liabilities.