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Bossie Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity
Bossie Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system. All the indirect costs in the company have been sub-divided into three activity cost pools: (1) Assembly, (2) Setting up and (3) Other costs. In the first stage, all indirect costs are allocated to the three activity cost pools and in the second stage, costs from each activity cost pool are allocated to the products. |
Indirect Costs: | |
Wages and salaries | $296,000 |
Depreciation | 236,000 |
Utilities | 176,000 |
Total | $708,000 |
First stage allocation: | ||||
Activity Cost Pools | ||||
Assembly | Setting up | Other | Total | |
Wages and salaries | 50% | 20% | 30% | 100% |
Depreciation | 20% | 35% | 45% | 100% |
Utilities | 10% | 70% | 20% | 100% |
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