Duerr Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs:
Wages and salaries $400,000
Depreciation 180,000
Occupancy 200,000
Total $780,000
The distribution of resource consumption across the three activity cost pools is given below:
Activity Cost Pools
Fabricating Order Processing Other Total
Wages and salaries 55% 20% 25% 100%
Depreciation 10% 50% 40% 100%
Occupancy 35% 40% 25% 100%
How much cost, in total, would be allocated in the first-stage allocation to the Order Processing activity cost pool?
A) $250,000
B) $286,000
C) $156,000
D) $312,000
Solution Preview
The problem is a multiple choice question on cost ...
Solution Summary
The problem deals with apportioning order processing costs at the first stage of allocation.
The first stage of allocation is the stage at which costs, in a company's cost centre, are first distributed to the respective units.
Dimaio Company 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:
Costs:
Manufacturing overhead 580,000
Selling and administrative expenses 240,000
Total 820,000
Distribution of res
CostAllocation is a method to identify and distribute indirect costs. Direct costs are costs assignable to a specific cost objective, whereas indirect costs are costs incurred for multiple cost objectives or not assignable to a specific cost objective without effort disproportionate to the benefit received.
The benefits rec
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Example Problem:
A sales manager has 3 areas and 5 sales engineers.
If the assignment of sales engineers to areas will
result in the expected sales as shown, how should
the engineers be assigned to maximize sales?
Activity-based Costing (ABC)
ReebookRealflex produces shoes for circuit training and walking. Recently, the management of the company has decided to adopt the activity-based costing system and has identified three activity cost pools. Information on its annual overhead costs and the activity cost pools are as follows: Activ
Web-books.com is an internet company that sells books on the World Wide Web. The president of the company authorized an activity-based costing study to understand the cost of various activities that are driving overhead at Web-books.com. Selected activites include:
- website maintenance - costs do not vary as a function of
I would like help on identify the relative advantages and disadvantages of each of the three primary costallocation methods (Direct Allocation, Step-Down Allocation, and Reciprocal Allocation).
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....
16 The Wildcat Company has provided the following information:
Units of Output 30,000 Units 42,000 Units
Direct materials $ 180,000 $ 252,000
Workers' wages 1,080,000 1,512,000
Supervisors' salaries 312,000
