Escau Company is a wholesale distributor that uses activity-based costing for all of its overhead...
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Accounting
Escau 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:
| Overhead costs: | |
| Wages and salaries | $380,000 |
| Other expenses | 100,000 |
| Total | $480,000 |
Distribution of Resource Consumption:
| Activity Cost Pools | ||||
| Filling Orders | Customer Support | Total | ||
| Wages and salaries | 30% | 70% | 100% | |
| Other expenses | 35% | 65% | 100% |
The activity measures for the activity cost pools for the year are as follows:
| Activity Cost Pool | Activity |
| Filling orders | 3,000 orders |
| Customer support | 20 customers |
To the nearest whole dollar, what is the total cost that would be allocated to a customer who placed eight orders in a year?
Question 17
a.
$397
b.
$20,000
c.
$16,947
d.
$16,550
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