uestion 4 Walsh Corporation has an activity-based costing system with three acti

Question

uestion 4 Walsh Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: ot yet nswered oints out of 3 Fiag uestion Overhead costs: Equipment expense Indirect labor Distribution of Resource Consumption Across Activity Cost Pools: $ 73,000 $ 6,000 Activity Cost Pools Processing Supervising Other 0.20 0.40 0.20 Equipment expense Indirect labor Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow 0.60 0.40 0.20

Explanation / Answer

Overhead cost allocated to supervising activity cost pool under activity based costing = $15,800

Hence correct option is (c)

  

Overhead costs Cost Proportion allocated to supervising Overhead cost allocated to supervising Equipment expense $73,000 0.20 73,000 x 0.20 = $14,600 Indirect labor $6,000 0.20 6,000 x 0.20 = $ 1,200 Total $79,000 $ 15,800

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.