Problem
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 $228,800, and 17,600 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 Elegant Occasions would receive if it had 10,000 sales orders.