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    Activity Based Costing - Second Stage Allocation

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    Larner 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 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.................... 5 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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    https://brainmass.com/business/accounting/activity-based-costing-second-stage-allocation-253555

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    Solution Summary

    The solution explains the overhead allocation using activity based costing

    $2.19

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