Capizzi 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 V2 under activity-based costing?
A)$28,980
B)$5,600
C)$34,580
D)$40,000

Question

Capizzi 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 V2 under activity-based costing?
A)$28,980 
B)$5,600 
C)$34,580 
D)$40,000

Quizplus · Accepted Answer

Machining: $32,200 F1F1F1S1F1F1F10 10,000 MHs = $3.22 per MH
Order Filling: $8,000 F1F1F1S1F1F1F10 2,000 orders = $4.00 per order
Overhead cost for Product V2:
 11eaa48f_7b94_f723_9e4a_aba378a844ef_TB2485_00

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