Product Costs using Activity Rates
Elegant Occasions Inc. sells china and flatware over the Internet. For the next period, the budgeted cost of the sales order processing activity is $115,500 and 5,250 sales orders are estimated to be processed.
a. Determine the activity rate of the sales order processing activity.
$ per sales order
b. Determine the amount of sales order processing cost that Elegant Occasions would receive if it had 2,300 sales orders.
$