How much cost, in total, should not be allocated


Diehl 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

$480,000

Selling and Administrative Expenses

$100,000

Total

$580,000

Distribution of Resource Consumption:

Activity Cost Pools

Order

Customer

Size

Support

Other

Total

Manufacturing Overhead

5%

85%

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, should not be allocated to products in the second stage of the allocation process if the activity-based costing system is used for internal decision making?

 

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Accounting Basics: How much cost, in total, should not be allocated
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