Question

Hagy Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other. The company's overhead costs, which consist of factory utilities and indirect labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Data concerning the company's costs and activity-based costing system appear below:

Factory utilities (total)	$	97,000
Indirect labor (total)	$	12,000

Distribution of Resource Consumption Across Activity Cost Pools

	Processing	Setting Up	Other
Factory utilities	0.40	0.50	0.10
Indirect labor	0.20	0.30	0.50

Required:

Assign overhead costs to activity cost pools using activity-based costing.

Answer 1

	Processing	Setting Up	Other
Factory Utilities	$        38,800	$      48,500	$         9,700
Indirect Labor	$          2,400	$        3,600	$         6,000
Total	$        41,200	$      52,100	$       15,700