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

question 7

Multiple Choice

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

• A)$13,200
• B)$14,700
• C)$8,100
• D)$1,500

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Definitions:

Incentive Pay

Compensation awarded to employees to motivate them towards higher performance and efficiency, often linked to achievements or goals.

Financial Benefits

Monetary-based benefits provided to employees, such as insurance, retirement plans, bonuses, and salary increases.

Shareholders

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Team Awards

Recognition given to a group of people for their collective performance or achievements in a particular project or area of work.