Dimaio 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:
|
Overhead costs: |
|
|
Manufacturing overhead |
$580,000 |
|
Selling and administrative expenses v |
240,000 |
|
Total |
$820,000 |
Distribution of resource consumption:
|
|
Activity Cost Pools |
|||
|
|
Order Size |
Customer Support |
Other |
Total |
|
Manufacturing overhead |
50% |
40% |
10% |
100% |
|
Selling and administrative expenses |
5% |
75% |
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?
A) $302,000
B) $41,000
C) $225,500
D) $410,000