bagail Corp. uses activity-based costing system with three activity cost pools.

Question

bagail Corp. uses activity-based costing system with three activity cost pools. The following information is provided:

Costs: Wages and salaries $   204,000

Depreciation                           102,000

Utilities                                    115,000

Total                                     $440,000

Activity Cost Pools

                                  Assembly    Setting Up      Other     

Wages and salaries       0.50           30%           10%     

Depreciation                  0.33           45%              20%     

Utilities                          0.27           40%              30%      

How much total cost would be allocated to the Assembly activity cost pool?

Explanation / Answer

Costs: Wages and salaries 204000 Depreciation 102000 Utilities 115000 Total 440000 Activity Cost Pools                                   Assembly    Setting Up   Other      Sum of weightages Costs: Wages and salaries 0.5 30% 10% 0.9 Depreciation 0.33 45% 20% 0.98 Utilities 0.27 40% 30% 0.97 Total Costs: Wages and salaries 113333.3 68000 22666.67 Depreciation 34346.94 46836.73 20816.33 Utilities 32010.31 47422.68 35567.01 Total 179690.58 .=Answer

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