Asked by ronak hindocha on Apr 24, 2024
Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts--equipment depreciation and supervisory expense--to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below: Distribution of Resource Consumption Across Activity Cost Pools:
In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products.Activity:
Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.Sales and Direct Cost Data:
What is the overhead cost assigned to Product W1 under activity-based costing? (Round your intermediate calculations to 2 decimal places and your final answer to nearest whole dollar amount.)
A) $17,172
B) $70,140
C) $21,122
D) $3,951
Overhead Cost
Indirect expenses related to the general operation of a company, including administrative and facility costs not directly tied to production.
Activity-Based Costing
A costing method that assigns costs to products based on the activities required to produce them, improving accuracy by identifying cost drivers.
Machine-Hours
A measure of production time, expressed in hours, that machinery is operating.
- Ascertain the overhead cost allocated to products utilizing Activity-Based Costing.
Learning Objectives
- Ascertain the overhead cost allocated to products utilizing Activity-Based Costing.
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