$10,223 $2,145 $8,078 $28,920 Doede Corporation uses activity-based costing to c
ID: 2391743 • Letter: #
Question
$10,223
$2,145
$8,078
$28,920
Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining Order Filling, and Other-based on resource consumption. Data to perform these allocations appear below: Overhead costs: Equipment depreciation $39,000 Supervisory expense $ 9,200 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Equipment depreciation Supervisory expense 0.60 0.60 0.30 0.20 Other 0.10 0.20 In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity: Orders (Order Filling) MHs (Machining) Product W1 Product MO Total 5,940 15,300 21,240 186 988 1,174 Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins Sales and Direct Cost Data Product W1 Product MO Sales (total) Direct materials (total) $30,800 $15,200 Direct labor (total) $70,000 $62,300 $16,100 $31,800 What is the overhead cost assigned to Product W1 under activity-based costing? (Round your intermediate calculations to 2 decimal places and your final answer to nearest whole dollar amount.)Explanation / Answer
Cost allocation :
Overhead cost assigned to product W1 = (1.36*5940+11.53*186) = 10223
So answer is a) $10223
Machining order filling Other Equipment depreciation 23400 11700 3900 Supervisory expense 5520 1840 1840 Total 28920 13540 5740 Cost driver 21240 1174 Activity rate 1.36 11.53Related Questions
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