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:

10,790          

2,910            

How much overhead cost is allocated to the Order Filling activity cost pool under activity-based costing?

$25,050

$1,000

$26,050

$57,450

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

Overhead cost is allocated to the Order Filling activity cost pool = Equipment depreciation*0.30 +  Supervisory expense*0.20

Overhead cost is allocated to the Order Filling activity cost pool = 83500*0.30 + 5000*0.20

Overhead cost is allocated to the Order Filling activity cost pool = $ 26050

Answer

$26,050

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.