Doede Corporation Uses Activity-Based Costing to Compute Product Margins

question 234

Multiple Choice

Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts--equipment depreciation and supervisory expense--to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below: Distribution of Resource Consumption Across Activity Cost Pools:
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:
Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.Sales and Direct Cost Data:
What is the overhead cost assigned to Product W1 under activity-based costing? (Round your intermediate calculations to 2 decimal places and your final answer to nearest whole dollar amount.)

• A) $17,172
• B) $70,140
• C) $21,122
• D) $3,951

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Definitions:

Infertility

The inability of a person to conceive a child naturally after one year of regular, unprotected sexual intercourse.

Conceive

Conceive means to form or devise a plan or idea in the mind.

One Year

A period of time that consists of 12 consecutive months.

Metabolism Decreases

The process by which the body’s ability to convert food and drink into energy slows down, typically as part of aging.