Question

COVID 19 Co has an activity-based costing system with three activity cost pools-Machining, Assembly, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and facotry expense, are allocated to three activity cost pools based on resource consumption. Data used in the first stage allocations follow Overhead costs: Equipment depreciation $79,600 Factory expense $5,000 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Assembly Other Equipment depreciation 0.30 0.50 0.20 Factory expense 0 50 0.30 O 20 Machining costs are assigned to products using machine-hours (MHs) and Assembly costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Machine-hours (Machining) Orders (Assembly) Product YB 1070 1,550 9.700 1,630 Product YA The activity rate for the Machining activity cost pool under activity based costing is closest to (Round your intermediate calculations to 2 decimal places.) Select one

Answer 1

	Machining
Equipment distribution	79600*.30= 23880
Factory expense	5000*.50= 2500
Total cost allocated to machining	26380
Total number of machine hours (1070+9700)	10770
Activity rate for machining	26380/10770=$ 2.45 per Machine hours