Question: Dierich 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
Dierich 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 | $600,000 |
| Selling and administrative expenses | 220,000 |
| Total | $820,000 |
Distribution of Resource Consumption:
| Activity Cost Pools | ||||
| Order Size | Customer Support | Other | Total | |
| Manufacturing overhead | 15% | 75% | 10% | 100% |
| Selling and administrative expenses | 60% | 20% | 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.
How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool?
Multiple Choice
$123,000
$222,000
$307,500
$492,000
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