Question

Diehl Company uses an activity-based costing system with three activity cost pools. The company has provided the following data concering is costs and system Costs: Manufacturing overhead Selling and administrative expenses Total $180,000 100.000 $580,000 Distribution of Resource Consumption: Activity Cost Pools Order Size Customer Support 5% 85% Other Total 10% 100% Manufacturing Joverhead 20% 60% 100% 20% Selling and administrative expenses The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. You have been asked to complete the a How much cost, in total, would be allocated to the Order Size activity cost pool?

Answer 1

Calculating cost allocated to order size activity.

	ORDER SIZE
Manufacturing overhead	480000*5% = 24000
Selling and administrative expenese	100000*60% = 60000
Total	840000

So the answer is $84000