Gem Systems
Gem Systems uses an activity-based costing system.The company has gathered the following information concerning various cost pools and activity drivers;

The following data was collected and is specific to Job 150.

Refer to Gem Systems.What is the amount of electricity cost allocated to Job 150?
A)$ 1,000
B)$15,000
C)$ 3,000
D)$ 5,000

Question

Gem Systems
Gem Systems uses an activity-based costing system.The company has gathered the following information concerning various cost pools and activity drivers;

The following data was collected and is specific to Job 150.

Refer to Gem Systems.What is the amount of electricity cost allocated to Job 150?
A)$ 1,000 
B)$15,000 
C)$ 3,000 
D)$ 5,000

Quizplus · Accepted Answer

Based on the information given, the total cost of electricity for the period was $60,000, and the total activity level for the period was 20,000 machine hours. Therefore, the cost driver rate for electricity would be $3 per machine hour. Job 150 incurred 1,000 machine hours, so the electricity cost allocated to Job 150 would be $3,000 ($3 per machine hour x 1,000 machine hours).

Gem Systems Gem Systems Uses an Activity-Based Costing System.The Company Has Gathered