CalcOne makes small, solar-charged, 10-key handheld calculators from purchased parts. It is a manual operation consisting of three stages. Materials cost $1.25. Several back office employees handle the orders and invoices. Finally, the company has a sales force that sells the product. The following are the cost pools and driver information for each of these departments.

REQUIRED:

a. Calculate the activity cost rates for each of the cost pools.

b. One customer buys 5,000 units on one order. It takes two invoices to get payment, which comes in three checks that are processed by Accounting. What is the total cost of this customer‘s order?

Transcribed Image Text:

Driver Activity Driver Cost Frequency Assembly Units made 750,000 $562,500 Order processing Orders taken 10,000 $200,000 Invoicing Invoices mailed 25,000 $150,000 Accounting Checks received 50,000 $250,000 Sales Orders taken 10,000 $300,000