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An activity based costing system is used at Emos, Inc. to assign products overhead costs. First, the two overhead costs of Equipment depreciation and Heating
An activity based costing system is used at Emos, Inc. to assign products overhead costs. First, the two overhead costs of Equipment depreciation and Heating and Cooling expense are allocated to three activity cost pools - Sanding, Weaving, and Other - based on resource consumption. The information used to perform these allocations is below: Overhead Costs: Equipment depreciation: $130,000 Heating and Cooling expense: $150,000 Distribution of Resource Consumption across Activity Cost Pools: Overhead Cost Activity Cost Pools Sanding Weaving Other Equipment depreciation 0.36 0.32 0.32 Heating and Cooling expense 0.26 0.40 0.34 In the second stage, Sanding costs are assigned to products using machine hours and Weaving costs are assigned to products using the number of direct labor hours. The costs in the Other activity pool are not assigned to products. Activity data for the company's two products is as follows: machine hours direct labor hours Product VM-004: 2,100 3,100 Product LS-172: 1,800 2,300 Total: 3,900 5,400 PART A: How much overhead cost is assigned to the Weaving activity cost pool under activity based costing in the first stage of allocation? PART B: The activity rate for the Weaving activity cost pool under activity based costing is closest to: PART C: What is the overhead cost assigned to Product LS-172 under activity based costing
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