Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other....
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Accounting
Deemer 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
$
102,000
Indirect labor
$
7,500
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 F6
15,000
610
Product X0
1,260
640
Total
16,260
1,250
The activity rate for the Supervising activity cost pool under activity-based costing is closest to:
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