Question 1: Spacely Company's Fabrication Department incurred $125,000 of factory overhead cost in producing gears and sprockets. The two products consumed a total od 4,000 direct machine hours. Of that amount, sprockets consumed 1,800 direct machine hours.
Determine the total amount of factory overhead that should be allocated to sprockets.
Question 2: Net Gift Registry Inc. sells china and flatware over the Internet. For the next period, the budgeted cost of the sales order processing activity is $99,400 and $14,200 sales orders are estimated to be processed.
a. Determine the activity rate of the sales order processing activity.
b. Determine the amount of sales order processing cost that china would receive if it had 6,500 sales orders.