Lion Corporation uses an activity-based costing system to assign overhead coststo products. In the first stage, two overhead costs--equipment depreciation andsupervisory expense-are allocated to three activity cost pools--Machining, OrderFilling, and Other--based on resource consumption. Data to perform theseallocations appear below:Overhead costs:EquipmentdepreciationSupervisoryexpenseEquipmentdepreciationDistribution of Resource Consumption Across Activity Cost Pools:Product C9$ 47,000Product UO$ 6,000TotalSupervisory expense 0.60Activity Cost PoolsO $18.00 per MHO $5.30 per MHO $2.82 per MHO $3.18 per MHMac0.60In the second stage, Machining costs are assigned to products using machine-hours (MHS) and Order Filling costs are assigned to products using the numberof orders. The costs in the Other activity cost pool are not assigned to products.Activity data for the company's two products follow:6,900OrderFilling3,1000.10MHS(Machining)10,000b.20200Other8000.30Orders (OrderFilling)1,0000.20The activity rate for the Machining activity cost pool under activity-basedcosting is closest to:

Steps to compute the cost of a product under Activity Based Costing:- Allocate overhead cost to…

Lion Corporation uses an activity-based costing system to assign overhead costs to products. In the first stage, two overhead costs--equipment depreciation and supervisory expense-are allocated to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below: Overhead costs: Equipment depreciation Supervisory expense Equipment depreciation $ 47,000 Distribution of Resource Consumption Across Activity Cost Pools: $6,000 Product C9 Activity Cost Pools Machining 0.60 Order Filling 0.10 Supervisory expense 0.60 In the second stage, Machining costs are assigned to products using machine- hours (MHS) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: 0.20 MHS (Machining) 6,900 Other 0.30 200 0.20 Orders (Order Filling)

Lion Corporation uses an activity-based costing system to assign overhead costs to products. In the first stage, two overhead costs--equipment depreciation and supervisory expense-are allocated to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below: Overhead costs: Equipment depreciation Supervisory expense Equipment depreciation $ 47,000 Distribution of Resource Consumption Across Activity Cost Pools: $6,000 Product C9 Activity Cost Pools Machining 0.60 Order Filling 0.10 Supervisory expense 0.60 In the second stage, Machining costs are assigned to products using machine- hours (MHS) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: 0.20 MHS (Machining) 6,900 Other 0.30 200 0.20 Orders (Order Filling)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Meester Corporation has an activity-based costing system with three activity cost pools--Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment depreciation Supervisory expense $ 87,000 $ 9,400 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Order Filling Machining other Equipment depreciation Supervisory expense 0.60 0.30 0.10 0.60 0.20 0.20 Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Activity: Orders (Order Filling) MHs (Machining) Product MØ 1,510 1,030 Product H2 9,030 2,250 Total…
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