Diehl Corporation Uses an Activity-Based Costing System with Three Activity

question 131

Multiple Choice

Diehl Corporation 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: Distribution of resource consumption:
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.How much cost, in total, would be allocated in the first-stage allocation to the Customer Support activity cost pool?

• A) $304,500
• B) $493,000
• C) $116,000
• D) $428,000

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Definitions:

Labor Rate Variance

The difference between the actual cost of labor and the expected (or budgeted) cost.

Actual Results

The real outcomes or results achieved and recorded after a particular period or activity, often compared against planned or forecasted results.

Standard Cost System

An accounting method that applies estimated costs to product units to predict production expenses and aid in budgeting.

Labor Rate Variance

The discrepancy between what labor actually costs and what was initially budgeted or considered as the standard labor cost.