Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption. Data to perform these allocations appear below:Overhead costs: Equipment depreciation$92,000Supervisory expense$4,000??Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools MachiningOrder FillingOtherEquipment depreciation0.600.200.20Supervisory expense0.300.200.50In the second stage, 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: MHs (Machining)Orders (Order Filling)Product W14,200800Product M015,800200Total20,0001,000Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.Sales and Direct Cost Data: Product W1Product M0Sales (total)$236,500$262,000Direct materials (total)$90,900$123,900Direct labor (total)$110,400$76,100What is the overhead cost assigned to Product W1 under activity-based costing?
A. $48,000
B. $11,844
C. $27,204
D. $15,360
Answer: C
You might also like to view...
Once a deferred tax asset valuation allowance is established, it can be either increased or decreased in future years.
Answer the following statement true (T) or false (F)
La Belle released a cut glass bottle of perfume at $299 per item, even though its major competitor prices its signature scent at $99 per item. La Belle reasons that customers in search of luxury goods will prefer its product because they are likelier to believe that high price indicates superior quality. What price adjustment strategy is evident in its reasoning?
A) seasonal pricing B) time-based pricing C) captive product pricing D) psychological pricing E) location-based pricing
Research shows that increased ______ potentially has somewhat negative effects on members' reaction to and interactions with each other
A. facilitation B. incentives C. diversity D. control
Successful negotiation of a settlement requires each party to give up something in exchange for getting something from the other party
Indicate whether the statement is true or false