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Category > Accounting Posted 03 Aug 2017 My Price 12.00

Ollivier Corporation

Ollivier 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:

  Overhead costs:  
  Equipment expense $64,000
  Indirect labor $13,800
Distribution of Resource Consumption Across Activity
Cost Pools:
 

Activity Cost Pools
  Processing Supervising Other
  Equipment expense 0.60     0.20     0.20    
  Indirect labor 0.60     0.30     0.10    

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:
  Activity:    
  MHs (Processing) Batches (Supervising)
  Product C4 12,000            640             
  Product L7 1,330            1,010             
  Total 13,330            1,650             

The activity rate for the Supervising activity cost pool under activity-based costing is closest to: (CHOOSE ONE)
  $10.27 per batch
  $2.79 per batch
  $5.57 per batch
  $47.15 per batch

 

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Maurice Tutor
(5)
Status NEW Posted 03 Aug 2017 08:08 PM My Price 12.00

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