Ginger Corporation uses an activity-based costing system with three activity cos

Question

Ginger Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system Costs Wages and salarie Depreciatin $360,000 140,000 160,000 $660,000 Distribution of resource consumption: Activity Cost Pools Assembly 10% 5% 15% Setting Up 80% 50% 60% Other 10% 45% 25% Total 100% 100% 100% Wages and salaries Depreciation How much cost, in total, would be allocated to the Setting Up activity cost pool? $528,000 $454,000 $418,000 $396,000

Explanation / Answer

Calculate total cost allocated to setting up :

So answer is b) $454000

Setting up Wages and salaries (360000*80%) 288000 Depreciation (140000*50%) 70000 Utilities (160000*60%) 96000 Total setting up cost 454000

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