Question

Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

Overhead costs:
Equipment expense	$	127,000
Indirect labor	$	14,800

Distribution of Resource Consumption Across Activity Cost Pools:

	Activity Cost Pools
	Processing	Supervising		Other
Equipment expense	0.50	0.40		0.10
Indirect labor	0.50	0.30		0.20

Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:

Activity:

	MHs (Processing)	Batches (Supervising)
Product F6	11,000	1,010
Product X0	1,390	530
Total	12,390	1,540

What is the overhead cost assigned to Product X0 under activity-based costing? (Round your intermediate calculations to 2 decimal places.)

• $7,950.80

• $19,011.10

• $36,940.00

• $26,962.00

Answer 1

	Processing	Supervising	Other
Equipment expense	63500	50800	12700
	(127000*0.5)	(127000*0.4)	(127000*0.1)
Indirect labor	7400	4440	2960
	(14800*0.5)	(14800*0.30)	(14800*0.2)
Total	70900	55240	15660
Activity drivers	12390	1540
	MH hrs	Batches
Activity driver rate	$                    5.72	$         35.87
Overhead allocated to product X0
Processing = 1390 hrs *5.72 =		$         7,951
Supervising =530 batches*35.87		$       19,011
Total		$       26,962
Correct Option : LAST
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