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Leaper Corporation

Leaper Corporation uses an activity-based costing system with three activity cost pools: fabrication, order processing, and other. The company provided costs of wages and salaries ($360,000), depreciation ($140,000), and occupancy ($160,000) that are distributed across the activity cost pools. The activity rate for order processing, which is closest to $1,465 per order, is calculated using the costs allocated to that activity cost pool.

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Hannah Corpuz
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112 views2 pages

Leaper Corporation

Leaper Corporation uses an activity-based costing system with three activity cost pools: fabrication, order processing, and other. The company provided costs of wages and salaries ($360,000), depreciation ($140,000), and occupancy ($160,000) that are distributed across the activity cost pools. The activity rate for order processing, which is closest to $1,465 per order, is calculated using the costs allocated to that activity cost pool.

Uploaded by

Hannah Corpuz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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24.

Leaper Corporation uses an activity-based costing system with the following three activity cost
pools:

Activity Cost Pool Total Activity


Fabrication.................................. 40,000 machine-hours
Order processing......................... 200 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............... $360,000


Depreciation......................... 140,000
Occupancy...........................  160,000
Total..................................... $660,000

The distribution of resource consumption across activity cost pools is given below:

Activity Cost Pools


Order
Fabrication Processing Other Total
Wages and salaries............... 35% 40% 25% 100%
Depreciation......................... 5% 55% 40% 100%
Occupancy........................... 30% 45% 25% 100%

The activity rate for the Order Processing activity cost pool is closest to:

A) $1,485 per order

B) $1,540 per order

C) $1,465 per order

D) $1,320 per order


Ans:  C LO:  2,3

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