Question

Beckley Corporation has provided the following data from its activity based costing accounting systems:

Indirect factory wages $16,000

Factor Equipment Depreciation $193,000

Distribution of resource Consumption across activity cost pools:

Indirect factory wages customer orders(48%) product processing (47%) other (5%) total(100%)

Factory equipment depreciation customer orders(61%) product processing (25%) other(14%) total(100%)

The other activity cost pool consists of the costs of idle capacity and organization sustaining costs that are not assigned to products

Required:

a) determine the total amount of indirect factory wages and factory equipment depreciation costs that would be allocated to the Product Processing activity cost pool.

b) determine the total amount of indirect factory wages and factory equipment depreciation costs that would NOT be assigned to products.

Answer 1

a)
Allocations to the Product Processing activity cost pool:
Indirect factory wages (47% × $16,000)	$          7,520
Factory equipment depreciation (25% × $193,000)	$        48,250
Total	$        55,770
b)
The costs allocated to the “Other” cost pool are not assigned to products.
Indirect factory wages (5% × $16,000)	$             800
Factory equipment depreciation (14% × $193,000)	$        27,020
Total	$        27,820