Lake 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: Finally, the costs of Processing and Supervising are combined with the following sales and direct cost data to determine product margins. What is the product margin for Product L2 under activity-based costing?
A)$32, 764
B)$69, 300
C)$17, 344
D)$56, 200

Question

Lake 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:  Finally, the costs of Processing and Supervising are combined with the following sales and direct cost data to determine product margins.  What is the product margin for Product L2 under activity-based costing?
A)$32, 764 
B)$69, 300 
C)$17, 344 
D)$56, 200

Quizplus · Accepted Answer

The Answer of Lake 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:  Finally, the costs of Processing and Supervising are combined with the following sales and direct cost data to determine product margins.  What is the product margin for Product L2 under activity-based costing?
A)$32, 764 
B)$69, 300 
C)$17, 344 
D)$56, 200

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