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3 October, 11:42

Huish Awnings makes custom awnings for homes and businesses. The company uses an activity-based costing system for its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity cost pools:

Overhead Costs:

Production overhead $150,000

Office expense 100,000

Total $250,000

Distribution of resource consumption:

Activity Cost Pools

Making Awnings Job Support Other Total

Production overhead 45% 40% 15% 100%

Office expenses 8% 65% 27% 100%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows:

Activity Cost Pool Annual Activity

Making awnings 5,000 metres

Job support 200 jobs

Other Not applicable

Prepare the first-stage allocation of overhead costs to the activity cost pools

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  1. 3 October, 13:37
    0
    Answer and Explanation:

    The preparation of the First stage allocation of overhead costs to the activity cost pools is presented below

    Particulars Making awnings Job Support Other Total

    Production Overhead $67,500 $60,000 $22,500 $150,000

    Office Expenses $8,000 $65,000 $27,000 $100,000

    The production overhead is allocated in 45% 40%, 15% and 100%

    And,

    The office expenses is allocated in 8%, 65%, 27% and 100%

    The same is shown above
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