Problem

Second-Stage AllocationLamer Corporation is a diversified manufacturer of industrial goods...

Second-Stage Allocation

Lamer Corporation is a diversified manufacturer of industrial goods. The company’s activity-based costing system contains the following six activity cost pools and activity rates:

Activity Cost Pool

Activity Rates

Supporting direct labor

$7.00

per direct labor-hour

Machine processing

$3.00

per machine-hour

Machine setups

$40.00

per setup

Production orders

$160.00

per order

Shipments

$120.00

per shipment

Product sustaining

$800.00

per product

Activity data have been supplied for the following products:

 

Total Expected Activity

 

J78

W52

Direct labor-hours

1,000

40

Machine-hours

3,200

30

Machine setups

5

1

Production orders

5

1

Shipments

10

1

Product sustaining

1

1

Required:

Determine the total overhead cost that would be assigned to each of the products listed above in the activity-based costing system.

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Solutions For Problems in Chapter 7