Orzel Corporation has provided the following data concerning its overhead costs for the coming year:
Wages and salaries
$240,000
Depreciation
120,000
Occupancy
180,000
Total
$540,000
The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year:
Activity Cost Pool
Total Activity
Assembly
10,000 labor-hours
Order processing
500 orders
Other
Not applicable
The Other activity cost pool does not have a measure of activity; it is used to accumulate costs of idle capacity and organization-sustaining costs.
The distribution of resource consumption across activity cost pools is given below:
Activity Cost Pools
Assembly
Order Processing
Other
Total
Wages and salaries
30%
50%
20%
100%
Depreciation
15%
35%
50%
100%
Occupancy
5%
65%
30%
100%
The activity rate for the Assembly activity cost pool is closest to:
A) $2.70 per labor-hour
B) $9.00 per labor-hour
C) $9.90 per labor-hour
D) $16.20 per labor-hour