Eccles 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: Distribution of resource consumption:
How much cost, in total, would be allocated in the first-stage allocation to the Assembly activity cost pool?
A) $316,233
B) $328,900
C) $486,200
D) $149,600

Question

Eccles 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:  Distribution of resource consumption:
 How much cost, in total, would be allocated in the first-stage allocation to the Assembly activity cost pool?
A) $316,233 
B) $328,900 
C) $486,200 
D) $149,600

Quizplus · Accepted Answer

To calculate the cost allocated to the Assembly activity cost pool, we need to multiply the cost driver rate for each activity by the amount of activity consumed by the pool.

For Assembly activity cost pool: 
Cost driver rate = Total cost of Assembly activity / Total units of cost driver 
= $558,000 / 1,500 machine-hours 
= $372 per machine-hour

Activity consumption: 
Assembly activity = 880 machine-hours

Cost allocated to Assembly activity cost pool = 372 x 880 = $328,900

Therefore, the correct answer is B.

Eccles Corporation Uses an Activity-Based Costing System with Three Activity