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 labor, are 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 $ 73,000 $ 6,000 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Processing Supervising 0.60 0.20 0.40 Equipment expense Indirect labor Other 0.20 0.40 0.20 Processing costs are assigned to products using machine-hours (MHSand Supervising costs are assigned to products using the number of batches. The costs in the other activity cost pool are not assigned to products. Activity data for the company's two products follow: Activity Product 76 Product xo HBB Batches (Processing) (Supervising) 1,000 600 9,000 10,000 1,000 Total How much overhead cost is allocated to the Supervising activity cost pool under activity based costing

Answer 1

Overhead allocated to supervising activity cost pool

	Supervising
Equipment expense (73000*20%)	14600
Indirect labor (6000*20%)	1200
Total overhead cost	15800