Figge and Mathews PLC, a consulting firm, uses an activity-based costing in whic
ID: 2339741 • Letter: F
Question
Figge and Mathews PLC, a consulting firm, uses an activity-based costing in which there are three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system Costs: Wages and salaries Travel expenses Other expenses $455,000 155,000 215,000 $825,000 Total Distribution of resource consumption Activity Cost Pools Working On Engagements Business Development Wages and salaries Travel expenses Other expenses 40% 40% 10% 25% 40% 50% Other 35% 20% 40% Total 100% 100% 100% Required: a. How much cost, in total, would be allocated to the Working On Engagements activity cost pool? b. How much cost, in total, would be allocated to the Business Development activity cost pool? c. How much cost, in total, would be allocated to the Other activity cost pool? Activity Cost Pool Total Cost a. Working On Engagements b. Business Development c. OtherExplanation / Answer
Answer
Working
Working on Engagements
Business Development
Other
Total
A
Wages & Salaries
40%
25%
35%
100%
B = 455000 x A
Allocation of Wages & Salaries - $ 455,000
$ 182,000.00
$ 113,750.00
$ 159,250.00
$ 455,000.00
C
Travel Expenses
40%
40%
20%
100%
D = 155000 x C
Allocation of Travel Expenses - $ 155,000
$ 62,000.00
$ 62,000.00
$ 31,000.00
$ 155,000.00
E
Other Expenses
10%
50%
40%
100%
F = 215000 x D
Allocation of Other expense - $ 215,000
$ 21,500.00
$ 107,500.00
$ 86,000.00
$ 215,000.00
G = B+D+F
Total Allocation
$ 265,500.00
$ 283,250.00
$ 276,250.00
$ 825,000.00
Activity Cost Pool
Total Costs
a.
Working on Engagements
$ 265,500.00
b.
Business Development
$ 283,250.00
c.
Other
$ 276,250.00
Working
Working on Engagements
Business Development
Other
Total
A
Wages & Salaries
40%
25%
35%
100%
B = 455000 x A
Allocation of Wages & Salaries - $ 455,000
$ 182,000.00
$ 113,750.00
$ 159,250.00
$ 455,000.00
C
Travel Expenses
40%
40%
20%
100%
D = 155000 x C
Allocation of Travel Expenses - $ 155,000
$ 62,000.00
$ 62,000.00
$ 31,000.00
$ 155,000.00
E
Other Expenses
10%
50%
40%
100%
F = 215000 x D
Allocation of Other expense - $ 215,000
$ 21,500.00
$ 107,500.00
$ 86,000.00
$ 215,000.00
G = B+D+F
Total Allocation
$ 265,500.00
$ 283,250.00
$ 276,250.00
$ 825,000.00
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