QUESTION 21

1. Mussenden Corporation has an activity-based costing system with three activity cost poolsMachining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

   Overhead costs:
   Equipment depreciation	$47,000
   Supervisory expense	$2,000
   Distribution of Resource Consumption Across Activity Cost Pools:
   	Activity Cost Pools
   	Machining	Order Filling	Other
   Equipment depreciation	0.60	0.10	0.30
   Supervisory expense	0.50	0.20	0.30

   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 data for the company's two products follow:

   Activity:
   	MHs (Machining)	Orders (Order Filling)
   Product P4	3,600	300
   Product S4	6,400	700
   Total	10,000	1,000

   What is the overhead cost assigned to Product S4 under activity-based costing?

   		$18,688
   		$22,258
   		$24,500
   		$3,570