Moorman Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other. The company's overhead costs consist of equipment depreciation and indirect labor and are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Equipment depreciation totals $62,000 and indirect labor totals $2,000. Data concerning the distribution of resource consumption across activity cost pools appear below:
Required:Assign overhead costs to activity cost pools using activity-based costing.

Question

Moorman Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other. The company's overhead costs consist of equipment depreciation and indirect labor and are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Equipment depreciation totals $62,000 and indirect labor totals $2,000. Data concerning the distribution of resource consumption across activity cost pools appear below:

Required:Assign overhead costs to activity cost pools using activity-based costing.

Ashish Verma · Accepted Answer

Final Answer :

Assign overhead costs to activity cost pools by applying the percentages in the above table to the respective costs. For example, the first entry in the below table is computed as follows: ${{[a(1)]:#,###}} × {{[a(3)]:#,##0.00}} = ${{[a(9)]:#,###}}.

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