Explore BrainMass

Explore BrainMass

    Managerial Accounting

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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

    © BrainMass Inc. brainmass.com June 3, 2020, 11:03 pm ad1c9bdddf
    https://brainmass.com/business/accounting/261020

    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

    ADVERTISEMENT