Higbie Corporation uses an activity-based costing system with three activity cos

Question

Higbie Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs:

costs;

wages  and salaries : $480,000

deprciation: $160,000

occupancy :$120,000

total:$760,000

The distribution of resource consumption across the three activity cost pools is given below:

activity costs pool

order

                                                               fabricating                  processing                      other                  total   

wages and salaries                          35%                                  40%                              25%                   100%

depriaction                                          15%                                 40%                                45%                  100%

utlities                                                  10%                                  50%                              40%                    100%

How much cost, in total, would be allocated in the first-stage allocation to the Fabricating activity cost pool?

answers

(a)$76,000

(b)$266,000

(C) $152,000

(D)   $204,000

Explanation / Answer

Hi,

Please find the answer as follows:

Option D is correct.

Thanks.

Wages and Salaries (480000*.35) 168000 Depreciation (160000*.15) 24000 Utilities (120000*.10) 12000 Total Value 204000

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