Meester 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 three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment depreciation$ 79,800Supervisory expense$ 4,900 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost PoolsMachiningOrder FillingOtherEquipment depreciation0.400.300.30Supervisory expense0.400.200.40 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 M01,270700Product H29,4101,430Total10,6802,130 How much overhead cost is allocated to the Order Filling activity cost pool under activity-based costing?

The assignment of indirect expenses to manufactured commodities is known as overhead allocation. It…

Answered: Meester Corporation has an…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 12E: Activity cost pools, activity rates, and product costs using activity-based costing Caldwell Home...

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Meester 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 three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

Overhead costs:
Equipment depreciation	$ 79,800
Supervisory expense	$ 4,900

Distribution of Resource Consumption Across Activity Cost Pools:

	Activity Cost Pools
Machining	Order Filling	Other
Equipment depreciation	0.40	0.30	0.30
Supervisory expense	0.40	0.20	0.40

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 M0	1,270	700
Product H2	9,410	1,430
Total	10,680	2,130

How much overhead cost is allocated to the Order Filling activity cost pool under activity-based costing?

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