Question: Lake Corporation has an <a href=activity-based costing system with three activity cost posts-Processing, …” />

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Show transcribed image text Lake Corporation has an activity-based costing system with three activity cost posts-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 allocation follow: Overhead costs: Equipment expense…… $96,000 Indirect labor ………. $4,000 Distribution of Resource Consumption Across Activity Cost Pools: 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: Finally, the cost of Processing and Supervising are combined with the following sales and direct cost data to determine product margins. Sales and Direct Cost Data: Product R4 Product L2 Sales (total) …………. $234, 600 $269, 600 Direct materials (total) …………. $81, 100 $120, 200 Direct labor (total) ………… $116, 600 $93, 200 How much overhead cost is allocated to the Supervising activity cost pool under activity costing? $19, 200 $2,000 $39, 200 $21, 200 The activity rate for the Supervising activity cost pool under activity-based costing is closest to: $6.67 per batch $4.00 per batch $21.20 per batch $100.00 per batch What is the overhead cost assigned to Product L2 under activity-based costing? $50,000 $69, 300 $17, 344 $56, 200

Lake Corporation has an activity-based costing system with three activity cost posts-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 allocation follow: Overhead costs: Equipment expense…… $96,000 Indirect labor ………. $4,000 Distribution of Resource Consumption Across Activity Cost Pools: 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: Finally, the cost of Processing and Supervising are combined with the following sales and direct cost data to determine product margins. Sales and Direct Cost Data: Product R4 Product L2 Sales (total) …………. $234, 600 $269, 600 Direct materials (total) …………. $81, 100 $120, 200 Direct labor (total) ………… $116, 600 $93, 200 How much overhead cost is allocated to the Supervising activity cost pool under activity costing? $19, 200 $2,000 $39, 200 $21, 200 The activity rate for the Supervising activity cost pool under activity-based costing is closest to: $6.67 per batch $4.00 per batch $21.20 per batch $100.00 per batch What is the overhead cost assigned to Product L2 under activity-based costing? $50,000 $69, 300 $17, 344 $56, 200

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