Question Details
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:
|
| Overhead costs: | |
| Equipment
expense | $64,000 |
| Indirect labor | $13,800 |
Distribution of Resource Consumption Across Activity
Cost Pools: | |||
Activity Cost Pools
| |||
Processing |
Supervising | Other | |
| Equipment
expense | 0.60
| 0.20
| 0.20
|
| Indirect labor | 0.60
| 0.30
| 0.10
|
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:
|
| Activity: | ||
| MHs
(Processing) | Batches
(Supervising) | |
| Product C4 | 12,000
| 640
|
| Product L7 | 1,330
| 1,010
|
| Total | 13,330
| 1,650
|
The activity rate for the Supervising activity cost pool under
activity-based costing is closest to: (CHOOSE ONE)
|
| $10.27 per batch | |
| $2.79 per batch | |
| $5.57 per batch | |
| $47.15 per batch |
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This question was answered on: Dec 08, 2020
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DATE ANSWEREDDec 08, 2020
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