Deemer Corporation has an activity-based costing system with three activity cost

Question

Deemer 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: Overhead costs: Equipment expense Indirect labor $73,000 6,000 Distribution of Resource Consumption Across Activity Cost Pools Activity Cost Pools Processing Supervising Equipment expense Indirect labor 0.60 0.40 0.20 0.20 Other 0.20 0.40 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: Activity: MHS Batches (Processing) (Supervising) Product F6 Product X0 Total 1,000 9,000 10,000 600 400 1,000 What is the overhead cost assigned to Product X0 under activity-based costing?

Explanation / Answer

Processing Supervising Other Equipment expense 43800 14600 14600 Indirect labor 2400 1200 2400 Total 46200 15800 17000 Product X0 Processing 41580 =46200/10000*9000 Supervising 6320 =15800/1000*400 Total overhead cost assigned 47900

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