Kleppe Corporation has provided the following data from its activity-based costi
ID: 2350613 • Letter: K
Question
Kleppe Corporation has provided the following data from its activity-based costing accounting system:Indirect factory wages ................ $280,000
Factory equipment depreciation. $200,000
Distribution of Resource Consumption across Activity Cost Pools:
Activity Cost Pools
Customers Product
Orders Processing Other Total
Indirect factory wages......... 10% 80% 10% 100%
Factory equipment depreciation 20% 60% 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 indirect factory wages and factory equipment depreciation cost would be assigned to the Customer Orders activity cost pool?
Explanation / Answer
Cost allocated to customer orders activity cost pool Indirect factory wages = 280000 x 0.1 = $28000 Factory Depreciation = 200000 x 0.2 = $40000 Total Cost pool = 40000 + 28000 = $68000 Hope this helps!
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