Reference no: EM13646235
Use the following to answer questions:
Dietz Company uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system:
Costs:
|
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Manufacturing overhead............................
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$440,000
|
|
|
Selling and administrative expenses..........
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240,000
|
|
|
Total...........................................................
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$680,000
|
Distribution of resource consumption:
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|
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Activity Cost Pools
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|
|
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Order Size
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Customer Support
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Other
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Total
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|
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Manufacturing overhead......................
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55%
|
35%
|
10%
|
100%
|
|
|
Selling and administrative expenses....
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30%
|
50%
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20%
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100%
|
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. You have been asked to complete the first-stage allocation of costs to the activity cost pools.
1. How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool?
A) $314,000
B) $289,000
C) $204,000
D) $374,000
2. How much cost, in total, would be allocated in the first-stage allocation to the Customer Support activity cost pool?
A) $274,000
B) $238,000
C) $289,000
D) $340,000
3. How much cost, in total, should NOT be allocated to orders and products in the second stage of the allocation process if the activity-based costing system is used for internal decision-making?
A) $68,000
B) $0
C) $92,000
D) $136,000