Hochberg Corporation uses an activity-based costing system with the following three activity cost pools: ...
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Accounting
Hochberg 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 | 125 | orders | |
| Other | Not applicable | ||
|
| |||
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:
| Wages and salaries | $ | 486,000 | |
| Depreciation | 149,000 | ||
| Occupancy | 134,000 | ||
| Total | $ | 769,000 | |
|
| |||
The distribution of resource consumption across activity cost pools is given below:
| Activity Cost Pools | ||||
| Fabricating | Order Processing | Other | Total | |
| Wages and salaries | 5% | 75% | 20% | 100% |
| Depreciation | 10% | 30% | 60% | 100% |
| Occupancy | 10% | 70% | 20% | 100% |
|
| ||||
The activity rate for the Fabrication activity cost pool is closest to:
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