04.(4 Marka)
Golden 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 ............ $680,000
Nonwage expenses....... 120,000
Total..................... $800,000
Distribution of resource consumption:
Activity Cost pool Filing orders Product Support Other Total
Wages and salaries 15% 75% 10% 100%
Non-wage expenses 25% 55% 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 4,000 orders
Product support 40 products
Other Not applicable
Required:
How much is the activity rate for product support activity cost pool?