Ollivier Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: 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:
-What is the overhead cost assigned to Product L7 under activity-based costing?
A)$1,672
B)$9,022
C)$7,350
D)$19,000

Question

Ollivier Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:   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: 
-What is the overhead cost assigned to Product L7 under activity-based costing?
A)$1,672 
B)$9,022 
C)$7,350 
D)$19,000

Quizplus · Accepted Answer

Processing: $15,200 F1F1F1S1F1F1F10 10,000 MHs = $1.52 per MH
Supervising: $14,700 F1F1F1S1F1F1F10 1,000 batches = $14.70 per batch
Overhead cost for Product L7:
 11eaa48f_7b93_2257_9e4a_8d6357509359_TB2485_00

Ollivier Corporation Has an Activity-Based Costing System with Three Activity