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An activity based costing system is used at Terresa Company to assign products overhead costs. First, the two overhead costs of Heating and Cooling expense
An activity based costing system is used at Terresa Company to assign products overhead costs. First, the two overhead costs of Heating and Cooling expense and Rent expense are allocated to three activity cost pools - Finishing, Machining, and Other - based on resource consumption. The information used to perform these allocations is below: Overhead Costs: Heating and Cooling expense: $130,000 Rent expense: $150,000 Distribution of Resource Consumption across Activity Cost Pools: Overhead Cost Activity Cost Pools Finishing Machining Other Heating and Cooling expense 0.36 0.32 0.32 Rent expense 0.26 0.40 0.34 In the second stage, Finishing costs are assigned to products using direct labor hours and Machining costs are assigned to products using the number of machine hours. The costs in the Other activity pool are not assigned to products. Activity data for the company's two products is as follows: direct labor hours machine hours Product LS-162: 2,100 3,100 Product LS-157: 1,800 2,300 Total: 3,900 5,400 PART A: How much overhead cost is assigned to the Machining activity cost pool under activity based costing in the first stage of allocation?Answer 1 Question 9 $101,600 PART B: The activity rate for the Machining activity cost pool under activity based costing is closest to:Answer 2 Question 9 $18.81 PART C: What is the overhead cost assigned to Product LS-157 under activity based costing
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