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Angel Corporation Uses Activity-Based Costing to Determine Product Costs for External

question 61

Multiple Choice

Angel Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:
$\begin{array}{lrr} &\text { Estimated } \\ \text {Activity Cost Pools (and Activity Meseasure } & \text {overhead Cost}\\ \text { Machine related (machine-hours) . } &£ 81,600\\ \text { Batch setup (setups) .} &£ 387,000 \\ \text { General factory (direct labour-hours) . } & £ 274,800 \\\end{array}$

$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Expected Activity }$
$\begin{array}{lrr}\text { Activity Cost Pools }& \text { Total } & \text {Product X}& \text { Product Y}\\ \text {Machine related. } &8,000&3,000&5,000\\ \text { Batch setup. } &10,000&2,000&8,000\\ \text {General factory } &12,000&7,000&5,000\\\end{array}$

Assuming that actual activity turns out to be the same as expected activity, the total amount of overhead cost allocated to Product X would be closest to:

Definitions:

Post-closing Trial Balance

A list of all company accounts that remain after adjusting entries and closing entries have been made, used to test the balance of debits and credits.

Asset Accounts

Accounts on a balance sheet representing resources owned or controlled by a company with future economic value.

Liability Accounts

Accounts that represent amounts owed to creditors or bills that must be paid in the future, contributing to a company’s liabilities on the balance sheet.

Post-closing Trial Balance

A list of all company accounts that remain after adjusting and closing entries are made, used to ensure debits equal credits.