An activity based costing system is used at Haldeman, SA to assign products overhead costs. First, the two overhead costs of Equipment depreciation and Water expense are allocated to three activity cost pools - Handling, Machining, and Other - based on resource consumption. The information used to perform these allocations is below: Overhead Costs: Equipment depreciation: $50,000 Water expense: $60,000 Distribution of Resource Consumption across Activity Cost Pools: Overhead Cost Activity Cost Pools Handling Machining Other Equipment depreciation 0.28 0.34 0.38 Water expense 0.32 0.22 0.46 The second stage of allocation is done by assigning the Handling costs to products on the basis of orders filled while products are assigned Machining costs based on machine hours. Costs assigned to the Other activity pool are not further assigned to products. Activity information for Haldeman's only two products is below: orders filled machine hours Product LS-157: 3,400 3,400 Product XR-2: 3,800 2,300 Total: 7,200 5,700 PART A: How much overhead cost is assigned to the Handling activity cost pool under activity based costing in the first stage of allocation? (33200, 29200, 16800, 14000, OR 13200) PART B: The activity rate for the Handling activity cost pool under activity based costing is closest to: (4.61, 2.32, 2.95, 3.86, OR 2.67) PART C: What is the overhead cost assigned to Product LS-157 under activity based costing? (33692, 18014, 15678, 36200, OR 27800)
An activity based costing system is used at Haldeman, SA to assign products
Overhead Costs:
- Equipment depreciation: $50,000
- Water expense: $60,000
Distribution of Resource Consumption across Activity Cost Pools:
| Overhead Cost | Activity Cost Pools | ||
| Handling | Machining | Other | |
| Equipment depreciation | 0.28 | 0.34 | 0.38 |
| Water expense | 0.32 | 0.22 | 0.46 |
The second stage of allocation is done by assigning the Handling costs to products on the basis of orders filled while products are assigned Machining costs based on machine hours. Costs assigned to the Other activity pool are not further assigned to products. Activity information for Haldeman's only two products is below:
| orders filled | machine hours | |
| Product LS-157: | 3,400 | 3,400 |
| Product XR-2: | 3,800 | 2,300 |
| Total: | 7,200 | 5,700 |
PART A:
How much overhead cost is assigned to the Handling activity cost pool under activity based costing in the first stage of allocation? (33200, 29200, 16800, 14000, OR 13200)
PART B:
The activity rate for the Handling activity cost pool under activity based costing is closest to: (4.61, 2.32, 2.95, 3.86, OR 2.67)
PART C:
What is the overhead cost assigned to Product LS-157 under activity based costing? (33692, 18014, 15678, 36200, OR 27800)
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