Mussenden 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 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: How much overhead cost is allocated to the Order Filling activity cost pool under activity-based costing?
A)$400
B)$4, 700
C)$14, 700
D)$5, 100

Question

Mussenden 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 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:  How much overhead cost is allocated to the Order Filling activity cost pool under activity-based costing?
A)$400 
B)$4, 700 
C)$14, 700 
D)$5, 100

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 second entry in the table is computed as follows: $47, 000 × 0.60 = $4, 700.
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Mussenden Corporation Has an Activity-Based Costing System with Three Activity