QUESTION 2:

Meester 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 depreciation Supervisory expense $ 84,000 $ 5,500 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling 0.50 0.20 0.50 0.10 Equipment depreciation Supervisory expense Other 0.30 0.40 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: Product MO Product H2 MHS (Machining) 1,430 9,170 10,600 Orders (Order Filling) 1,240 2,230 3, 470 Total The activity rate for the Order Filling activity cost pool under activity-based costing is closest to: Multiple Choice O $5.00 per order $2.43 per order $2.00 per order $50.00 per order 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 Indirect labor $43,000 $ 7,600 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Processing Supervising 0.40 0.50 0.40 0.50 Equipment expense Indirect labor Other 0.10 0.10 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 Product F6 Product xo Batches (Processing) (Supervising) 12,900 1,130 1,440 750 14,340 1,880 Total The activity rate for the Supervising activity cost pool under activity-based costing is closest to: Multiple Choice $8.76 per batch $4.38 per batch $26.91 per batch $13.46 per batch