Lysiak Corporation uses an activity based costing system to assign overhead cost
ID: 2577711 • Letter: L
Question
Lysiak Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs--equipment depreciation and supervisory expense-are allocated to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below: Overhead costs: Equipment depreciation $ 47,000 Supervisory expense $ 6,000 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Other Equipment depreciation 0.60 0.10 0.30 Supervisory expense 0.60 0.20 0.20 In the second stage, 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: Activity: MHs (Machining) Orders (Order Filling) Product C9 6,900 200 Product U0 3,100 800 Total 10,000 1,000 What is the overhead cost assigned to Product C9 under activity-based costing?
Explanation / Answer
Answer: $23122
Calculations:
Cost $ Machining Order Filling Other Equipment depreciation 47000 0.6 0.1 0.3 28200 4700 14100 Supervisory expense 6000 0.6 0.2 0.2 3600 1200 1200 Total $ 53000 31800 5900 15300Related Questions
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