Question

Goertz Corporation has an activity-based costing system with three activity cost pools--Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment depreciation 51,000 Supervisory expense 3,000 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Equipment depreciation Supervisory expense 0.40 0.20 0.10 0.30 Other 0.50 0.50 Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Activity: MHS Orders (Order (Machining) Filling) Product J3 Product F7 Total 9,100 900 10,000 100 900 1,000 Finally, the costs of Machining and Order Filling are combined with the following sales and direct cost data to determine product margins.

Answer 1

Answer)

My answer is option $6 per order.

The equipment depreciation allocated to order filing:

$51000×0.10=$5100

The supervisory expenses allocated to order filing:$3000×0.3

=$900

Total cost allocated to order filling:$5100+$900=$6000

Cost per order under activity costing:$6000/1000 orders

=$6 per order.