Share
Explore BrainMass

Managerial Accounting

Tatman Corp. uses an activity-based costing system with the following 3 activity cost pools:
Activity Cost Pool Total Activity
Fabrication...................10,000 machine-hours
Order processing..............800 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 concerniing its costs:
Wages and salaries..........$320,000
Depreciation................ 220,000
Occupancy................... 120,000
Total.......................$660,000

The distribution of resource consumption across activity cost pools is given:
Activity Cost Pools
Order
Fabrication Processing Other Total
Wages and salaries.....20% 65% 15% 100%
Depreciation...........15% 35% 50% 100%
Occupancy.............. 5% 70% 25% 100%

The activity rate for the FABRICATION activity cost pool is closest to:
A)$3.30 per machine hour
B)$13.20 per machine hour
C)$10.30 per machine hour
D)$8.80 per machine hour

Solution Summary

The solution goes into a great amount of detail regarding the question being asked. The solution is ideal for any student who wants a deep understanding of the concepts. The solution is explained in detail. Overall, an excellent response.

$2.19