Question

Diehl Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system: Costs: Manufacturing overhead $ 480,000 Selling and administrative expenses 100,000 Total $ 580,000 Distribution of resource consumption: Activity Cost Pools Order Size Customer Support Other Total Manufacturing overhead 5% 85% 10% 100% Selling and administrative expenses 60% 20% 20% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. You have been asked to complete the first-stage allocation of costs to the activity cost pools. How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool?

Answer 1

Calculate How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool :

	Order Size	Customer support	Other	Total
Manufacturing overhead	24000	408000	48000	480000
Selling and administrative expenses	60000	20000	20000	100000
Total	84000	428000	68000	580000

so answer is 84000