Question
EXERCISE 74 Second-Stage Allocation [LO4] Larner Corporation is a diversified manufacturer of industrial goods. The companys activity-based costing system contains the following six activity cost
EXERCISE 74 Second-Stage Allocation [LO4] Larner Corporation is a diversified manufacturer of industrial goods. The companys activity-based costing system contains the following six activity cost pools and activity rates:
Activity data have been supplied for the following products:
| Activity Cost Pool | Activity Rates |
| Supportingdirectlabor .................. | $7.00 per direct labor-hour |
| Machineprocessing .................... | $3.00 per machine-hour |
| Machine setups . . . . . . . . . . . . . . . . . . . . . . . . | $40.00 per setup |
| Productionorders ...................... | $160.00 per order |
| Shipments ............................ | $120.00 per shipment |
| Product sustaining . . . . . . . . . . . . . . . . . . . . . . | $800.00 per product |
| Total Expected Activity | ||
| J78 | W52 | |
| Direct labor-hours . . . . . . . . . . . | 1,000 | 40 |
| Machine-hours . . . . . . . . . . . . . | 3,200 | 30 |
| Machine setups . . . . . . . . . . . . | 5 | 1 |
| Production orders . . . . . . . . . . . | 5 | 1 |
| Shipments ................. | 10 | 1 |
| Product sustaining . . . . . . . . . . | 1 | 1 |
Required:
Determine the total overhead cost that would be assigned to each of the products listed above in the activity-based costing system.
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Fundamental Accounting Principles
Authors: Larson Kermit, Tilly Jensen
Volume I, 14th Canadian Edition
71051503, 978-1259066511, 1259066517, 978-0071051507
