1. Abagail Corp. uses activity-based costing system with three activity cost poo

Question

1. Abagail Corp. uses activity-based costing system with three activity cost pools. The following information is provided: Costs: Wages and salaries $ 202,000 Depreciation 102,000 Utilities 112,000 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

Amount allocated to Assembly activity cost pool:

Wages & Salaries = $202000 * .50 = $101000

Depreciation = $102000 * .33 = $33660

Utilities = $112000 * .27 = $30240

Total = $101000 + $33660 + $30240 = $164900

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