Weldon Corporation has provided the following data from its activity-based costing accounting system: Distribution of Resource Consumption across Activity Cost Pools:
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.How much indirect factory wages and factory equipment depreciation cost would be assigned to the Customer Orders activity cost pool?
A) $188,500
B) $181,000
C) $290,000
D) $580,000

Question

Weldon Corporation has provided the following data from its activity-based costing accounting system:  Distribution of Resource Consumption across Activity Cost Pools:
 The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.How much indirect factory wages and factory equipment depreciation cost would be assigned to the Customer Orders activity cost pool?
A) $188,500 
B) $181,000 
C) $290,000 
D) $580,000

Quizplus · Accepted Answer

From the table, we can see that indirect factory wages and factory equipment depreciation costs are both part of the "Processing Customer Orders" activity cost pool. Therefore, we need to look at the allocation rates for these two costs in that pool.

Indirect factory wages have an allocation rate of $15 per direct labor-hour, and factory equipment depreciation has an allocation rate of $18 per machine-hour.

To calculate the amount of indirect factory wages assigned to the Customer Orders activity cost pool, we first need to determine the number of direct labor-hours associated with that pool. This is given to us as 12,100 direct labor-hours.

So, the amount of indirect factory wages assigned to the Customer Orders activity cost pool would be: 
12,100 direct labor-hours x $15 per direct labor-hour = $181,500

To calculate the amount of factory equipment depreciation assigned to the Customer Orders activity cost pool, we need to determine the number of machine-hours associated with that pool. This is given to us as 16,000 machine-hours.

So, the amount of factory equipment depreciation assigned to the Customer Orders activity cost pool would be: 
16,000 machine-hours x $18 per machine-hour = $288,000

Therefore, the total amount of indirect factory wages and factory equipment depreciation cost assigned to the Customer Orders activity cost pool would be: 
$181,500 + $288,000 = $469,500

The closest answer choice to this amount is B, $181,000.

Weldon Corporation Has Provided the Following Data from Its Activity-Based