The following data have been provided by Kelch Corporation from its activity-bas

Question

The following data have been provided by Kelch Corporation from its activity-based costing accounting system:

Factory supervision.........$360,000
Indirect factory labor...... $280,000

Distribution of Resource Consumption across Activity Cost Pools:
Activity Cost Pools
Batch Expediting Other Total
Set-up
Factory supervision......5% 85% 10% 100%
Indirect factory labor...30% 50% 20% 100%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.

How much factory supervision and indirect factory labor cost would NOT be assigned to products using the activity-based costing system?
A) $0
B) $280,000
C) $360,000
D) $92,000

Explanation / Answer

Other Cost: Factory supervision: 10% × $360,000....................$36,000 Indirect factory labor: 20% × $280,000..................$56,000 Total.........................................................................$92,000....Option D

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