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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 Supervisory expense $ 40,000 $ 10,100 Distribution of Resource Consumption Across Activity Cost Pools: Equipment depreciation Supervisory expense Activity Cost Pools Machining Order Filling 0.50 0.20 0.50 0.10 Other 0.30 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: Product W1 Product MO Total MHS (Machining) 5,930 16,800 22,730 Orders (Order Filling) 140 965 1,105 Sales (total) Direct materials (total) Direct labor (total) Product W1 $ 67,800 $ 31,300 $ 23,000 Product MO $ 62,400 $ 20,800 $ 31,200 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 $7,664 O $25,050 $6,523 O O $1,141
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