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

question 33

Multiple Choice

Borden 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: $\begin{array}{l}\text { Overhead Costs: }\\\begin{array} { l r } \text { Indirect labor } & \$ 260,000 \\\text { Depreciation } & 220,000 \\\text { Utilities } & \underline{140,000} \\\text { Total }& \underline{\$ 620,000} \\\end{array}\end{array}$
Distribution of resource consumption:
Activity Cost Pools
$\begin{array} { l r c c c } & \text { Assembly } & \text { Setting up } & \text { Other } & \text { Total } \\ \text { Indirect labor } & 50 \% & 25 \% & 25 \% & 100 \% \\ \text { Depreciation } & 20 \% & 30 \% & 50 \% & 100 \% \\ \text { Utilities } & 25 \% & 45 \% & 30 \% & 100 \% \end{array}$


How much overhead cost, in total, would be allocated to the Setting Up activity cost pool?

• A) $206,000
• B) $194,000
• C) $279,000
• D) $217,000
• E) $155,000

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Definitions:

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