Explore BrainMass

Explore BrainMass

    Cost apportionment using first stage allocation

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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

    © BrainMass Inc. brainmass.com March 4, 2021, 9:26 pm ad1c9bdddf
    https://brainmass.com/business/management-accounting/cost-apportionment-using-first-stage-allocation-244596

    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.

    $2.19

    ADVERTISEMENT