Ollivier Corporation has an activity-based costing system with three activity co

Question

Ollivier Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

Activity Cost Pools

Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:

1,150           

860             

13,850           

1,860             

What is the overhead cost assigned to Product L7 under activity-based costing? (Round your intermediate calculations to 2 decimal places and your final answer to nearest whole dollar.)

$40,367

$2,312

$50,345

$38,055

Ollivier Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

Explanation / Answer

ProductL7 = (1150*2.0072) +(860 * 44.2473)

                 = 2308.28+ 38052.68

                = 40360.96

correct option is ""A = 40367 (approx)

Processing supervising other Equipment expense (128000) 25600 [128000*.2] 76800 Indirect labor(11000) 2200    [11000*.2] 5500 Total 27800 82300 Number of machine hours /batch 13850 1860 per MH /Batch cost 2.0072 44.2473

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