Mussenden Corporation has an activity-based costing system with three activity c
ID: 2405211 • Letter: M
Question
Mussenden 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:
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:
How much overhead cost is allocated to the Order Filling activity cost pool under activity-based costing?
Noreen 4e Rechecks 2017-24-03
$5,100
$4,700
$400
$14,700
Overhead costs: Equipment depreciation $ 47,000 Supervisory expense $ 2,000Explanation / Answer
Overhead cost allocated to the Order Filling activity cost pool = (47000*0.1)+(2000*0.2)= $5100
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