First-stage allocation to the customer support

Assignment Help Database Management System

Reference no: EM13646235

Use the following to answer questions:

Dietz Company uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system:

Costs:

	Manufacturing overhead............................	$440,000
	Selling and administrative expenses..........	240,000
	Total...........................................................	$680,000

Distribution of resource consumption:

	Activity Cost Pools
	Order Size	Customer Support	Other	Total
Manufacturing overhead......................	55%	35%	10%	100%
Selling and administrative expenses....	30%	50%	20%	100%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. You have been asked to complete the first-stage allocation of costs to the activity cost pools.

1. How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool?

A) $314,000

B) $289,000

C) $204,000

D) $374,000

2. How much cost, in total, would be allocated in the first-stage allocation to the Customer Support activity cost pool?

A) $274,000

B) $238,000

C) $289,000

D) $340,000

3. How much cost, in total, should NOT be allocated to orders and products in the second stage of the allocation process if the activity-based costing system is used for internal decision-making?

A) $68,000

B) $0

C) $92,000

D) $136,000

Reference no: EM13646235

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