Capizzi Corporation has an activity-based costing system with three activity cos

Question

Capizzi Corporation has an activity-based costing system with three activity cost pools-Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

Activity Cost Pools

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 data for the company's two products follow:

11,220          

2,470            

What is the overhead cost assigned to Product V2 under activity-based costing? (Round your intermediate calculations to 2 decimal places and final answer to nearest whole dollar amount.)

$82,110

$62,237

$15,844

$46,393

Capizzi Corporation has an activity-based costing system with three activity cost pools-Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

Explanation / Answer

Answer:-

Equipment depreciation $86,300
0.60 x 86,300 = 51,780 allocated to machining
0.30 x 86,300 = 25,890 allocated to order filling
Supervisory expense $7,400
0.60x 7,400=       $4,440       allocated to matching

0.20 x 7,400 = 1,480 allocated to order filling

(51,780+4,440)/11,220= 5.01 per machine hour

(25,890+1,480)/2,470 = 11.08 per order

(9,260 x 5.01)+(1,430 x 11.08)= $62,237     V2 Overhead costs

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