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 laborare 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 $99.00 $12,780 Distribution of Resource Consumption Across Activity Cost Pools Activity Cost Pools Processing Supervising Equipment expense Indirect labor Processing costs are assigned to products using machine hours (MH) and Supervising costs are assigned to products using the number of batches. The costs in the other activity cost pool are products Activity data for the company's two products follow Activity (Processing) 17,200 Batches (Supervising) Product F6 Product DÙ Total What is the overhead cost assigned to product onder activity based costing Round your interme

Answer 1

Distribution of Overhead costs in different Activities Overhead Costs Processing Supervising Particulars Other 30% 20% 50% Equipment expense $ 59,000.00 $17,700.00 $ 29,500.00 $ 11,800.00 20% 30% 50% $ Indirect Labour 12,700.00 $3,810.00 $ 6,350.00 $ 71,700.00 $21,5 10.00 35,850.00 $ 2,540.00 $ 14,340.00 ТОTAL Allocation of Expense Total Hours Total Batches Allocation Activity Amount 21510 18820 = Processing 1.14 per hour 21510 18820 35850/2520 = Supervising 14.23 per batch 35850 2520 Over head Cost Assgined to Product XO Activity Processing Supervising Total Overhead cost assigned $ 1,851.55 $ 18,920.83 $ 20,772.38 1620 hours x $1.14 1330 batches x $14.23

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