Dideda Corporation uses an activity-based costing system with
three activity cost pools. The company has provided the following
data concerning its costs and its activity based costing
system:
| Costs: | |||
| Manufacturing overhead | $ | 360,000 | |
| Selling and administrative expenses | 240,000 | ||
| Total | $ | 600,000 | |
| Distribution of resource consumption: | ||||
| Activity Cost Pools | ||||
| Assembly | Setting Up | Other | Total | |
| Manufacturing overhead | 25% | 65% | 10% | 100% |
| Selling and administrative expenses | 60% | 20% | 20% | 100% |
The "Other" activity cost pool consists of the costs of idle
capacity and organization-sustaining costs.
You have been asked to complete the first-stage allocation of costs
to the activity cost pools.
How much cost, in total, would be allocated in the first-stage
allocation to the Customer Support activity cost pool?
$255,000
$282,000
$120,000
$390,000
manufacturing overheads=360000
selling and administrative overheads=240000
total overheads=360000+240000=600000
statement of cost pool
assembly setting up others
manufacturing
overheads 360000 *0.25=90000 360000*0.65=234000 360000*0.10=36000
selling and 240000*0.60=144000 240000*0.20=48000 240000*0.20=48000
administrative expense
total 2,34000 282000 84000
Hence,282000 will be allocated to first stage allocation to customer support activity pool.
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