Activity: Product W3 Product H3 Total MHs (Processing) Batches (Supervising) 7,600 100 2,400 900 10,000 1,000 Finally, the costs of Processing and Supervising are combined with the following sales and direct cost data to determine product margins. Sales and Direct Cost Data: Sales (total) Direct materials (total) Direct labor (total) Product W3 $159,500 $ 66,300 $ 77,800 Product H3 $154,100 $55,300 $ 84,100 How much overhead cost is allocated to the Supervising activity cost pool under activity-based costing? ○ $7,300 $200 O $7,500 ○ $51,700 Addleman Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment expense Indirect labor $ 73,000 $ 1,000 Distribution of Resource Consumption Across Activity Cost Pools: Equipment expense Indirect labor Processing 0.20 Activity Cost Pools Supervising Other 0.10 0.70 0.20 0.20 0.60 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: Product W3 Product H3 Total MHs (Processing) Batches (Supervising) 7,600 100 2,400 900 10,000 1,000 Finally, the costs of Processing and Supervising are combined with the following sales and direct cost data to determine product margins. Sales and Direct Cost Data: Sales (total) Direct materials (total) Direct labor (total) Product W3 $159,500 $ 66,300 $ 77,800 Product H3 $154,100 $55,300 $ 84,100 How much overhead cost is allocated to the Supervising activity cost pool under activity-based costing? ○ $7,300 $200 O $7,500 ○ $51,700 Addleman Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment expense Indirect labor $ 73,000 $ 1,000 Distribution of Resource Consumption Across Activity Cost Pools: Equipment expense Indirect labor Processing 0.20 Activity Cost Pools Supervising Other 0.10 0.70 0.20 0.20 0.60 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:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Activity:
Product W3
Product H3
Total
MHs (Processing) Batches (Supervising)
7,600
100
2,400
900
10,000
1,000
Finally, the costs of Processing and Supervising are combined with the following sales and direct cost data
to determine product margins.
Sales and Direct Cost Data:
Sales (total)
Direct materials (total)
Direct labor (total)
Product W3
$159,500
$ 66,300
$ 77,800
Product H3
$154,100
$55,300
$ 84,100
How much overhead cost is allocated to the Supervising activity cost pool under activity-based costing?
○ $7,300
$200
O $7,500
○ $51,700
Transcribed Image Text:Addleman Corporation has an activity-based costing system with three activity cost pools--Processing,
Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment
expense and indirect labor, are allocated to the three activity cost pools based on resource consumption.
Data used in the first stage allocations follow:
Overhead costs:
Equipment expense
Indirect labor
$ 73,000
$ 1,000
Distribution of Resource Consumption Across Activity Cost Pools:
Equipment expense
Indirect labor
Processing
0.20
Activity Cost Pools
Supervising
Other
0.10
0.70
0.20
0.20
0.60
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:
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