# What would be the total overhead cost per order according to the activity based costing system?

Eskenazy 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:

Wages and salaries

\$580,000

Other expenses

120,000

Total

\$700,000

Distribution of resource consumption:

Activity Cost Pools

Filling Orders

Customer Support

Other

Total

Wages and salaries

15%

75%

10%

100%

Other expenses

55%

25%

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

Activity

Filling orders

2,000 orders

Customer support

20 customers

What would be the total overhead cost per order according to the activity based costing system? In other words, what would be the overall activity rate for the filling orders activity cost pool? (Round to the nearest whole cent.)

A) \$52.50

B) \$76.50

C) \$122.50

D) \$192.50