Business, 05.05.2020 21:22, colton6926
Meester 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:
Overhead costs:
Equipment depreciation $ 78,200
Supervisory expense $ 6,500
Distribution of Resource Consumption Across Activity Cost Pools:
Activity Cost Pools
Machining Order Filling Other
Equipment depreciation 0.50 0.30 0.20
Supervisory expense 0.50 0.20 0.30
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:
Activity:
MHs (Machining) Orders (Order Filling)
Product M0 1,090 1,220
Product H2 9,410 1,640
Total 10,500 2,860
The activity rate for the Order Filling activity cost pool under activity-based costing is closest to:
Multiple Choice
a.$86.60 per order
b.$5.66 per order
c.$6.09 per order
d.$8.66 per order
Answers: 2
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