Question: ABC 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

ABC 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 expense

$

81,200

Supervisory expense

$

11,200

Distribution of Resource Consumption Across Activity Cost Pools:

Activity Cost Pools

Machining

Order Filling

Other

Equipment expense

0.50

0.30

0.20

Supervisory expense

0.50

0.20

0.30

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

1,150

610

Product H2

9,060

2,280

Total

10,210

2,890

Determine the overhead cost assigned to Product H2 under activity-based costing showing all calculations.

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