Question
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
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 | $ 110,000 |
Supervisory expense | $ 6,900 |
Distribution of Resource Consumption Across Activity Cost Pools:
Activity Cost Pools | |||
---|---|---|---|
Machining | Order Filling | Other | |
Equipment depreciation | 0.40 | 0.30 | 0.30 |
Supervisory expense | 0.40 | 0.20 | 0.40 |
In 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 W1 | 5,570 | 180 |
Product M0 | 18,400 | 990 |
Total | 23,970 | 1,170 |
Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.
Sales and Direct Cost Data:
Product W1 | Product M0 | ||
---|---|---|---|
Sales (total) | $ 76,500 | $ 67,100 | |
Direct materials (total) | $ 33,000 | $ 16,000 | |
Direct labor (total) | $ 20,100 | $ 31,400 |
What is the overhead cost assigned to Product W1 under activity-based costing? (Round your intermediate calculations to 2 decimal places and your final answer to nearest whole dollar amount.)
Multiple Choice
-
$10,862
-
$46,760
-
$16,150
-
$5,288
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