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Asked by Dustin Hansen on May 06, 2024

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Bartow Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs--equipment expense and indirect labor--are allocated to the three activity cost pools--Processing, Supervising, and Other--based on resource consumption. Data to perform these allocations appear below: Bartow Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs--equipment expense and indirect labor--are allocated to the three activity cost pools--Processing, Supervising, and Other--based on resource consumption. Data to perform these allocations appear below: Distribution of Resource Consumption Across Activity Cost Pools: In the second stage, 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:Activity: How much overhead cost is allocated to the Processing activity cost pool under activity-based costing in the first stage of allocation? A) $5,800 B) $9,800 C) $4,000 D) $7,400 Distribution of Resource Consumption Across Activity Cost Pools:
Bartow Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs--equipment expense and indirect labor--are allocated to the three activity cost pools--Processing, Supervising, and Other--based on resource consumption. Data to perform these allocations appear below: Distribution of Resource Consumption Across Activity Cost Pools: In the second stage, 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:Activity: How much overhead cost is allocated to the Processing activity cost pool under activity-based costing in the first stage of allocation? A) $5,800 B) $9,800 C) $4,000 D) $7,400 In the second stage, 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:Activity:
Bartow Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs--equipment expense and indirect labor--are allocated to the three activity cost pools--Processing, Supervising, and Other--based on resource consumption. Data to perform these allocations appear below: Distribution of Resource Consumption Across Activity Cost Pools: In the second stage, 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:Activity: How much overhead cost is allocated to the Processing activity cost pool under activity-based costing in the first stage of allocation? A) $5,800 B) $9,800 C) $4,000 D) $7,400 How much overhead cost is allocated to the Processing activity cost pool under activity-based costing in the first stage of allocation?

A) $5,800
B) $9,800
C) $4,000
D) $7,400

Processing Activity

Activities involved in transforming inputs into finished goods through operations such as assembling, cooking, or chemical processing.

Activity-Based Costing

An accounting method that identifies the activities a firm performs and then assigns indirect costs to products. It improves accuracy of product costing by linking cost more directly to the activities that drive those costs.

Overhead Cost

Indirect expenses related to the general operation of a business, not directly tied to a specific product or service.

  • Master the technique of attributing overhead costs to activity cost pools at the onset of Activity-Based Costing.
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Catherine NewmanMay 10, 2024
Final Answer :
B
Explanation :
To allocate overhead costs to activity cost pools in the first stage, we multiply the overhead costs by the cost driver rates.

For Processing:
Equipment expense = $2,900 * 2 MHs = $5,800
Indirect labor = $3,900 * 0 batches = $0
Total allocated to Processing = $5,800

For Supervising:
Equipment expense = $2,900 * 0 MHs = $0
Indirect labor = $3,900 * 25 batches = $97,500
Total allocated to Supervising = $97,500

For Other:
Equipment expense = $2,900 * 4 MHs = $11,600
Indirect labor = $3,900 * 10 batches = $39,000
Total allocated to Other = $50,600

Therefore, the overhead cost allocated to the Processing activity cost pool is $5,800.

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