Laningham Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs-equipment depreciation and supervisory expense-are allocated to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption. Data to perform these allocations appear below: In the second stage, 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 Machining activity cost pool under activity-based costing in the first stage of allocation?
A)$2,100
B)$38,100
C)$36,000
D)$14,800

Question

Laningham Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs-equipment depreciation and supervisory expense-are allocated to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption. Data to perform these allocations appear below:  In the second stage, 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 Machining activity cost pool under activity-based costing in the first stage of allocation?
A)$2,100 
B)$38,100 
C)$36,000 
D)$14,800

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 first entry in the table is computed as follows: $60,000 F1F1F1S1F1F1F10 0.60 = $36,000.
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Laningham Corporation Uses an Activity Based Costing System to Assign