Youd Corporation 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: How much cost, in total, would be allocated in the first-stage allocation to the Other activity cost pool?
A)$264,000
B)$208,000
C)$242,000
D)$165,000

Question

Youd Corporation 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:   How much cost, in total, would be allocated in the first-stage allocation to the Other activity cost pool?
A)$264,000 
B)$208,000 
C)$242,000 
D)$165,000

Quizplus · Accepted Answer

The total cost allocated in the first-stage allocation to the Other activity cost pool can be found by subtracting the costs already allocated to the other two activity cost pools from the total overhead cost. 
Total overhead cost = $1,500,000 
Costs allocated to Product design = $800,000 
Costs allocated to Order processing = $528,000 
Total cost allocated to Other activity cost pool = $1,500,000 - $800,000 - $528,000 = $172,000 
However, there is an additional $36,000 of costs that are not assigned to any activity cost pool, so the total cost allocated to the Other activity cost pool is actually $172,000 + $36,000 = $208,000. 
Therefore, the correct answer is B.

Youd Corporation Uses an Activity-Based Costing System with Three Activity