Ballweg Corporation has an activity-based costing system with three activity cost pools-Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Finally, the costs of Machining and Order Filling are combined with the following sales and direct cost data to determine product margins.
-What is the overhead cost assigned to Product T2 under activity-based costing?
A)$5,150
B)$7,829
C)$15,500
D)$2,679

Question

Ballweg Corporation has an activity-based costing system with three activity cost pools-Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:  Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Finally, the costs of Machining and Order Filling are combined with the following sales and direct cost data to determine product margins. 
-What is the overhead cost assigned to Product T2 under activity-based costing?
A)$5,150 
B)$7,829 
C)$15,500 
D)$2,679

Quizplus · Accepted Answer

Machining: $3,800 F1F1F1S1F1F1F10 20,000 MHs = $0.19 per MH
Order Filling: $10,300 F1F1F1S1F1F1F10 1,000 orders = $10.30 per order
Overhead cost for Product T2:
 11eaa48f_7b94_5adf_9e4a_cfc349429df0_TB2485_00

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