Goldbard Company, a wholesale distributor, uses activity-based costing for its overhead costs. The…
Goldbard Company, a wholesale distributor, uses activity-based costing for 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
$540,000
Nonwage expenses
220,000
Total
$760,000
Distribution of resource consumption:
Filling
Product
Activity Cost Pools
Orders
Support
Other
Total
Wages and salaries
55%
35%
10%
100%
Nonwage expenses
15%
65%
20%
100%
The “Other” activity cost pool consists of the costs of idle capacity and organization sustaining costs.
The amount of activity for the year is as follows:
Activity Cost Pool
Annual Activity
Filling orders
3,000 orders
Product support
30 products
Other
Not applicable
Required:
Compute the activity rates (i.e., cost per unit of activity) for the Filling Orders and Product Support activity cost pools by filling in the table below:
Filling
Product
Orders
Support
Wages and salaries
Nonwage expenses
Total