Business, 15.07.2020 02:01 KarateKat

Tatman Corporation uses an activity-based costing system with the following three activity cost pools: Activity Cost Pool Total Activity
Fabrication 10,000 Machine-hours
Order Processing 800 Orders
Other N/A

The other activity pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided the following data concerning its costs:

Wages and Salaries 320,000
Depreciation 220,000
Occupancy 120,000
Total 660,000

The distribution of resource consumptions across activity cost pools is given below: (Activity Cost Pools/Order)

Fabrication Processing Other Total
Wages and salaries 20% 65% 15% 100%
Depreciation 15% 35% 50% 100%
Occupancy 5% 70% 25% 100%

The activity rate for the Fabrication activity cost pool is closest to:

a. $3.30 per machine-hour
b. $13.20 per machine-hour
c. $10.30 per machine-hour
d. $8.80 per machine-hour

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Tatman Corporation uses an activity-based costing system with the following three activity cost pool...

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