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Lysiak Corporation uses an activity based costing system to assign
Overhead costs: | ||
Equipment depreciation | $ | 47,000 |
Supervisory expense | $ | 6,000 |
Distribution of Resource Consumption Across Activity Cost Pools:
Activity Cost Pools | |||
Machining | Order Filling | Other | |
Equipment depreciation | 0.60 | 0.10 | 0.30 |
Supervisory expense | 0.60 | 0.20 | 0.20 |
In the second stage, 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:
Activity:
MHs (Machining) | Orders (Order Filling) | |
Product C9 | 6,900 | 200 |
Product U0 | 3,100 | 800 |
Total | 10,000 | 1,000 |
What is the overhead cost assigned to Product C9 under activity-based costing?

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- Identifying Cost Drivers. Palisades Company identified the activities listed in the following as being most important (step 1 and step 2 of activity-based costing), and it formed cost pools for each activity: 1. Purchasing raw materials 2. Inspecting raw materials 3. Storing raw materials 4. Maintaining production equipment 5. Setting up machines to produce batches of product 6. Testing finished products Required: Perform step 3 of the activity-based costing process by identifying a possible cost driver for each activity.arrow_forward1. With ABC, overhead costs are assigned to each product based on ________. Group of answer choices machine hours per product price of the product a predetermined overhead rate for a single cost driver the proportion of that product’s use of the cost driverarrow_forward(Appendix 4B) Sequential Method of Support Department Cost Allocation Stevenson Company is divided into two operating divisions: Battery and Small Motors. The company allocates power and general factory costs to each operating division using the sequential method. General Factory is allocated first in the sequential method for the company. Support department cost allocations using the sequential method are based on the following data: Support Departments Operating Divisions Overhead costs Machine hours Square footage Direct labor hours Required: Power Allocation ratios for General Factory Battery Power Small Motors $160,000 Allocation ratios for Power 2,000 1,000 General Factory $430,000 1. Calculate the allocation ratios for Power and General Factory. (Note: Carry these calculations out to four decimal places.) 2,000 1,500 Battery $163,000 7,000 7,500 18,000 Small Motors $84,600 1,500 20,000 60,000arrow_forward
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