Columbus Company provides the following ABC costing information:

The above activities used by their three departments are:

How much of the total costs will be assigned to the Lawn Department?
A)$192,000
B)$464,000
C)$174,800
D)$154,667

Question

Columbus Company provides the following ABC costing information:

The above activities used by their three departments are:

How much of the total costs will be assigned to the Lawn Department?
A)$192,000 
B)$464,000 
C)$174,800 
D)$154,667

Quizplus · Accepted Answer

To calculate the total cost assigned to each department, we need to multiply the cost driver rate by the amount of activity used by that department. 
For the Lawn Department, the cost driver rate is $25 ($50,000 / 2,000), and the total amount of activity used is 6,992. 
So, the total cost assigned to the Lawn Department is $174,800 ($25 x 6,992). Therefore, the best choice is C.

Columbus Company Provides the Following ABC Costing Information