Lehner Corporation has provided the following data from its activity-based costing accounting system: Indirect factory wages $616,000 Factory equipment depreciation $354,000 Distribution of Resource Consumption across Activity Cost Pools: Activity Cost Pools Customer Orders Product Processing Other Total Indirect factory wages 45% 40% 15% 100% Factory equipment depreciation 30% 50% 20% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products. How much indirect factory wages and factory equipment depreciation cost would NOT be assigned to products using the activity-based costing system? which one? $163,200 $0 $616,000 $354,000
Correct option A i.e. $163200 | ||||
Calculation of Overhead cost not allocated to Product | ||||
Cost | Amount | Percentage(Cost pool) | Overhead allocated to Others | |
Indirect Factory wages | 616,000 | 15% | 92,400 | |
Factory equipment depreciation | 354,000 | 20% | 70,800 | |
Total cost not allocated to product | 163,200 | |||
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