Business, 14.03.2020 00:17 breanastone14

Manton Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs—equipment expense and indirect labor—are allocated to the three activity cost pools—Processing, Supervising, and Other—based on resource consumption. Data to perform these allocations appear below:

Overhead costs:
Equipment expense $ 54,500
Indirect labor 9,900
Distribution of Resource Consumption Across Activity Cost Pools:
Activity Cost Pools
Processing Supervising Other
Equipment expense 0.60 0.20 0.20
Indirect labor 0.10 0.30 0.60

In the second stage, Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:

Activity:
MHs (Processing) Batches (Supervising)
Product Z5 6,670 2,160
Product C8 16,330 1,440
Total 23,000 3,600

How much overhead cost is allocated to the Processing activity cost pool under activity-based costing in the first stage of allocation?

a. $32,700

b. $33,690

c. $990

d. $9,690

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Manton Corporation uses an activity based costing system to assign overhead costs to products. In th...

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