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

question 136

Multiple Choice

Lake 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. How much overhead cost is allocated to the Supervising activity cost pool under activity-based costing?

• A)$19, 200
• B)$2, 000
• C)$39, 200
• D)$21, 200

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Definitions:

Meat Processing Laws

Meat processing laws are regulations that govern the handling, processing, and distribution of meat products to ensure safety, quality, and compliance with health standards.

United States Department Of Justice

The federal executive department responsible for enforcing the laws of the United States, overseeing legal affairs, and ensuring public safety against foreign and domestic threats.

Model Business Corporation Act

A standardized set of laws that serve as a blueprint for state legislatures to regulate the formation, operation, and dissolution of corporations.

Corporation Power

The legal and operational capabilities granted to a corporation by law, allowing it to conduct business, enter contracts, and own assets.