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Dideda Company Uses an Activity-Based Costing System with Three Activity

Question 40

Multiple Choice

Dideda 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 $360,000 Selling and administrative expenses 240,000 Total $600,000\begin{array} { | l | r | } \hline \text { Costs: } & \\\hline \text { Manufacturing overhead } & \$ 360,000 \\\hline \text { Selling and administrative expenses } & \underline { 240,000 } \\\hline \text { Total } & \$ 600,000 \\\hline\end{array}

 Distribution of Resource Consumption: \text { Distribution of Resource Consumption: }
\quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad  Activity Cost Pools \text { Activity Cost Pools } Order Size  Customer  Support  Other  Total  Manufacturing  overhead 25%65%10%100% Selling and  administrative  expenses 60%20%20%100%\begin{array} { |l | r | r | r | r | } \hline & \text { Order Size } & \begin{array} { r } \text { Customer } \\\text { Support }\end{array} & \text { Other } & \text { Total } \\\hline \begin{array} { l } \text { Manufacturing } \\\text { overhead }\end{array} & 25 \% & 65 \% & 10 \% & 100 \% \\\hline \begin{array} { l } \text { Selling and } \\\text { administrative } \\\text { expenses }\end{array} & 60 \% & 20 \% & 20 \% & 100 \% \\\hline\end{array} 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 Customer Support activity cost pool?


A) $120,000.
B) $255,000.
C) $282,000.
D) $390,000.

Correct Answer:

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