Reference no: EM132404555

Question

TB MC Qu. 06-68 Manton Corporation uses an activity based...

Manton Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs-equipment expense and indirect labor-are allocated to the three activity cost pools-Processing, Supervising, and Other-based on resource consumption. Data to perform these allocations appear below:

Overhead costs: Equipment expense $ 56,000 Indirect labor 10,200

Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Processing Supervising Other Equipment expense 0.60 0.20 0.20 Indirect labor 0.10 0.30 0.60

In the second stage, 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 Z5 6,960 2,280 Product C8 17,040 1,520 Total 24,000 3,800

How much overhead cost is allocated to the Processing activity cost pool under activity-based costing in the first stage of allocation?