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Instead of a plantwide predetermined overhead rate, companies can base the allocation of overhead on ABC. With the ABC costing system, the company determines activ
Instead of a plantwide predetermined overhead rate, companies can base the allocation of overhead on ABC. With the ABC costing system, the company determines activ cost pools, and activity measures - which are often the # of the cost drive i.e. number of employees, etc. Based on the fictitious information given below, complete the firs stage allocation of costs to activity cost pools. The following costs will be assigned using the ABC system: Driver and guard wages Vehicle operating expenses Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative costs Total cost Driver and guard wages.......... Vehicle operating expense......... Vehicle depreciation................ Customer representative salaries and expenses... Office expenses... Administrative expenses. Travel $1,630,000 The distribution of resource consumption across the activity cost pools is as follows: 50% 70% 60% 0% 0% $720,000 0% 280,000 120,000 160,000 30,000 320,000 Pickup and Delivery 35% 5% 15% 0% 20% 5% Customer Service 10% 0% 0% 90% 30% 60% Other 5% 25% 25% 10% 50% 35% Totals 100% 100% 100% 100% 100% 100% Instead of a plantwide predetermined overhead rate, companies can base the allocation of overhead on ABC. With the ABC costing system, the company determines acti cost pools, and activity measures - which are often the \#f of the cost drive ie. number of employees, etc, Based on the fictitious information given belpwi complete the fir stage allocation of costs to activity cost pools. The following costs will be assigned using the ABC system: The distribution of resource consumption across the activity cost pools is as follows: You are responsible for the first stage allocations of costs to activity cost pools by filling in the table below. Each entry in the table is derived by multiplying the total cost for the cost category by the percentage taken from the table below that shows the distribution of resource consumption
Instead of a plantwide predetermined overhead rate, companies can base the allocation of overhead on ABC. With the ABC costing system, the company determines activ cost pools, and activity measures - which are often the # of the cost drive i.e. number of employees, etc. Based on the fictitious information given below, complete the firs stage allocation of costs to activity cost pools. The following costs will be assigned using the ABC system: Driver and guard wages Vehicle operating expenses Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative costs Total cost Driver and guard wages.......... Vehicle operating expense......... Vehicle depreciation................ Customer representative salaries and expenses... Office expenses... Administrative expenses. Travel $1,630,000 The distribution of resource consumption across the activity cost pools is as follows: 50% 70% 60% 0% 0% $720,000 0% 280,000 120,000 160,000 30,000 320,000 Pickup and Delivery 35% 5% 15% 0% 20% 5% Customer Service 10% 0% 0% 90% 30% 60% Other 5% 25% 25% 10% 50% 35% Totals 100% 100% 100% 100% 100% 100%
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