Encarnacion Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:
Finally, the costs of Processing and Supervising are combined with the following sales and direct cost data to determine product margins.

-What is the overhead cost assigned to Product C6 under activity-based costing?
A)$19,920
B)$5,100
C)$42,500
D)$25,020

Question

Encarnacion Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:  Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:
Finally, the costs of Processing and Supervising are combined with the following sales and direct cost data to determine product margins.

-What is the overhead cost assigned to Product C6 under activity-based costing?
A)$19,920 
B)$5,100 
C)$42,500 
D)$25,020

Quizplus · Accepted Answer

Processing: $33,200 F1F1F1S1F1F1F10 20,000 MHs = $1.66 per MH
Supervising: $17,000 F1F1F1S1F1F1F10 1,000 batches = $17.00 per batch
 11eaa48f_7b92_8613_9e4a_efa04e0dd90f_TB2485_00

Encarnacion Corporation Has an Activity-Based Costing System with Three Activity