The Other Activity Cost Pool Is Used to Accumulate Costs

question 39

Multiple Choice

The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs.
The company has provided the following data concerning its costs: The distribution of resource consumption across activity cost pools is given below: The activity rate for the Order Processing activity cost pool is closest to:
A.$1,050 per order
B.$1,680 per order
C.$1,190 per order
<underLine>D.</underLine> $1,350 per order
Total Order Processing Cost:
-Cuna 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 Order Processing activity cost pool is closest to:

• A)$905 per order
• B)$630 per order
• C)$1,080 per order
• D)$840 per order

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Definitions:

Effective Management

Practices and techniques that lead to achieving desired results through efficient use of resources and team coordination.

Bullwhip Effect

A phenomenon where inaccurate or distorted information in a supply chain causes overreaction and variability in orders, often leading to inefficiency and excess inventory.

Weighted Total

A calculated total in which different components are given different levels of importance or weight, often used in assessments or decision-making processes.

Lot Size

Refers to the set quantity of items that are processed, ordered, or produced together at a time.