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

question 122

Multiple Choice

Keske Corporation has an activity-based costing system with three activity cost pools-Machining, Order Filling, and Other.In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to the three activity cost pools based on resource consumption.Data used in the first stage allocations follow: 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 data for the company's two products follow: Finally, the costs of Machining and Order Filling are combined with the following sales and direct cost data to determine product margins. How much overhead cost is allocated to the Order Filling activity cost pool under activity-based costing?

• A)$21, 400
• B)$2, 500
• C)$22, 900
• D)$20, 400

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Definitions:

International Trade Agreement

A treaty or accord between countries that governs the rules and guidelines for trade between the signatories.

Supply Chain

The entire process of making and selling commercial goods, including raw material gathering, manufacture, distribution, and sale.

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