Question

Meester Corporation has an activity-based costing system with three activity cost pools--Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

Overhead costs:

Equipment expense	$	79,800
Supervisory expense	$	4,900

Distribution of Resource Consumption Across Activity Cost Pools:

	Activity Cost Pools
	Machining	Order Filling		Other
Equipment expense	0.40	0.30		0.30
Supervisory expense	0.40	0.20		0.40

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

Activity:

	MHs (Machining)	Orders (Order Filling)
Product M0	1,270	700
Product H2	9,410	1,430
Total	10,680	2,130

What is the overhead cost assigned to Product H2 under activity-based costing? (Round your intermediate calculations to 2 decimal places.)

Answer 1

	Machining	Order filling	other
Equipment expense	$31,920 ($79,800 x 0.40)	$23,940 ($79,800 x 0.30)	$23,940 ($79,800 x 0.30)	$79,800
Supervisory expense	$1,960 ($4,900 x 0.40)	$980 ($4,900 x 0.20)	$1,960 ($4,900 x 0.40)	$4,900
Total	$33,880	$24,920	$25,900	$84,700
overhead cost allocated to product H2
Machining	$33,880 / 10,680 x 9,410	$29,851.20
order filling	24,920 / 2,130 x 1,430	$16,730.33
overhead cost allocated to product H2	$46,581.53