Question

Figge and Mathews PLC, a consulting firm, uses an activity-based costing in which there are three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system: Costs: Wages and salaries Travel expenses Other expenses Total $460,000 160,000 220,000 $840,000 Distribution of resource consumption: Activity Cost Pools Working on Engagement Business Development 301 Wages and salaries Travel expenses Other expenses Other 256 101 358 Total 1001 1001 1001 Required: a. How much cost, in total, would be allocated to the Working On Engagements activity cost pool? b. How much cost, in total, would be allocated to the Business Development activity cost pool? c. How much cost, in total, would be allocated to the other activity cost pool? Activity Cost Pool Total Cost a. Working On Engagements b. Business Development c. Other

Answer 1

Multiply each cost with the percentages provided in the table.

This can be done by Cost * Percentage

Add the total cost of each activity cost pools of three cost

The resultant will be the cost assigned to each activity cost pools.

Please go through the following attachment for solution.

Cost Working on engagements Business Developments Others Total Wages and Salaries 207000 138000 115000 460000 460000*45% 460000*30% 460000* 25% Travel Expenses 72000 72000 16000 160000 160,000*45% 160,000*45% 160,000*10% Other Expenses 33000 110000 77000 220000 220,000*15% 220,000*50% 220,000*35% Total 312000 320000 208000 840000 Total Cost Activity Cost Pool Working on engagements Business Developments Others b 312000 320000 208000