Duerr Corporation uses an activity-based costing system with three activity cost
ID: 2508722 • Letter: D
Question
Duerr Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs:
Costs:
Wages and salaries
$400,000
Depreciation
180,000
Occupancy
200,000
Total
$780,000
The distribution of resource consumption across the three activity cost pools is given below:
Activity Cost Pools
Fabricating
Order Processing
Other
Total
Wages and salaries
55%
20%
25%
100%
Depreciation
10%
50%
40%
100%
Occupancy
35%
40%
25%
100%
How much cost, in total, would be allocated in the first-stage allocation to the Fabricating activity cost pool?
$250,000
$286,000
$308,000
$312,000
Costs:
Wages and salaries
$400,000
Depreciation
180,000
Occupancy
200,000
Total
$780,000
Explanation / Answer
The correct answer is C. $ 308,000
Allocation ( Percentage * Cost) Activity Cost Pools Cost Fabricating Wages and salaries 55% 4,00,000 2,20,000 Depreciation 10% 1,80,000 18,000 Occupancy 35% 2,00,000 70,000 3,08,000Related Questions
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