6 Diamond 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 $340,000 Selling and administrative expenses 250,000 Total $590,000 Distribution of Resource Consumption: Activity Cost Pools Order Size Customer Support Other Total Manufacturing overhead 25% 50% 25% 100% Selling and administrative expenses 60% 30% 10% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. You have been asked to complete the first-stage allocation of costs to the activity cost pools. How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool? Select one: a. $150,000 b. $360,000 c. $255,000 d. $235,000
6
Diamond 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 |
$340,000 |
|
Selling and administrative expenses |
250,000 |
|
Total |
$590,000 |
Distribution of Resource Consumption:
|
Activity Cost Pools |
||||
|
|
Order Size |
Customer Support |
Other |
Total |
|
Manufacturing overhead |
25% |
50% |
25% |
100% |
|
Selling and administrative expenses |
60% |
30% |
10% |
100% |
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. You have been asked to complete the first-stage allocation of costs to the activity cost pools.
How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool?
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