Encarnacion Corporation Has an Activity-Based Costing System with Three Activity

question 114

Multiple Choice

Encarnacion Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: 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:
Finally, the costs of Processing and Supervising are combined with the following sales and direct cost data to determine product margins.

-What is the overhead cost assigned to Product C6 under activity-based costing?

• A)$19,920
• B)$5,100
• C)$42,500
• D)$25,020

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Definitions:

Lens

A transparent structure in the eye that focuses light rays onto the retina, enabling vision.

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Oscillating electric and magnetic fields that propagate through space carrying electromagnetic energy.

Orange

A citrus fruit known for its vibrant color and sweet, tangy flavor, as well as the name of the color itself.

Red

A color at the end of the visible spectrum of light, next to orange and opposite violet, often associated with passion, danger, or energy.