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: What is the overhead cost assigned to Product S4 under activity-based costing?
A)$18, 688
B)$3, 570
C)$24, 500
D)$22, 258

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:  What is the overhead cost assigned to Product S4 under activity-based costing?
A)$18, 688 
B)$3, 570 
C)$24, 500 
D)$22, 258

Quizplus · Accepted Answer

Machining: $29, 200 ÷ 10, 000 MHs = $2.92 per MH
Order Filling: $5, 100 ÷ 1, 000 orders = $5.10 per order
Overhead cost for Product S4:
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Mussenden Corporation Has an Activity-Based Costing System with Three Activity