Question

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:

Overhead costs:
Equipment expense	$125,000
Indirect labor	$5,200

Distribution of Resource Consumption Across Activity Cost Pools:
	Activity Cost Pools
	Processing	Supervising	Other
Equipment expense	0.40	0.40	0.20
Indirect labor	0.40	0.40	0.20

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:
	MHs (Processing)	Batches (Supervising)
Product C4	16,400	910
Product L7	1,490	1,350
Total	17,890	2,260

What is the overhead cost assigned to Product L7 under activity-based costing? (Round your intermediate calculations to 2 decimal places and your final answer to nearest whole dollar.)

$4,336

$35,440

$31,104

$45,418

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:

Overhead costs:
Equipment expense	$68,000
Indirect labor	$11,300

Distribution of Resource Consumption Across Activity Cost Pools:
	Activity Cost Pools
	Processing	Supervising	Other
Equipment expense	0.30	0.50	0.20
Indirect labor	0.30	0.40	0.30

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:
	MHs (Processing)	Batches (Supervising)
Product C4	17,500	980
Product L7	1,920	1,140
Total	19,420	2,120

The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

$13.47 per batch

$6.74 per batch

$37.41 per batch

$18.17 per batch

Answer 1

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