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 machine handling cost allocated to Job 150?
A)$ 1,000
B)$ 5,000
C)$25,000
D)None of the above

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 machine handling cost allocated to Job 150?
A)$ 1,000 
B)$ 5,000 
C)$25,000 
D)None of the above

Quizplus · Accepted Answer

From the given data, the machine handling cost pool has a total cost of $100,000 and an activity driver of 10,000 machine hours. The rate per machine hour would be $10 ($100,000 ÷ 10,000 machine hours). Job 150 required 500 machine hours, so the allocated machine handling cost would be $5,000 (500 machine hours x $10 per machine hour).

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