Question

A company usually processes 20,000 orders at a total cost of $250,000. During the year, only 10,000 orders were processed. What is the cost of unused activity? a.$200,000 b.$125,000 c.$150,000 d.$240,000

Answer 1

Answer: $125,000

Explanation: The Company usually processes 20,000 orders at a cost of $250,000. To process one order = 250,000/20,000=$12.5

Therefore if during the year 10,000 orders were proceeded. the cost will be

10,000 * $12.5 = $125,000