Traughber Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs-equipment expense and indirect labor-are allocated to the three activity cost pools-Processing, Supervising, and Other-based on resource consumption. Data to perform these allocations appear below: In the second stage, Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:
-How much overhead cost is allocated to the Processing activity cost pool under activity-based costing in the first stage of allocation?
A)$30,800
B)$38,900
C)$31,000
D)$200

Question

Traughber Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs-equipment expense and indirect labor-are allocated to the three activity cost pools-Processing, Supervising, and Other-based on resource consumption. Data to perform these allocations appear below:   In the second stage, Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: 
-How much overhead cost is allocated to the Processing activity cost pool under activity-based costing in the first stage of allocation?
A)$30,800 
B)$38,900 
C)$31,000 
D)$200

Quizplus · Accepted Answer

Assign overhead costs to activity cost pools by applying the percentages in the Distribution of Resource Consumption Across Activity Cost Pools table to the respective costs.For example,the first entry in the table is computed as follows: $77,000 F1F1F1S1F1F1F10 0.40 = $30,800.
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Traughber Corporation Uses an Activity Based Costing System to Assign