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Betterton Corporation uses an activity based costing system to assign overhead costs to products. In...

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Accounting

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Betterton Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs-equipment depreciation and supervisory expense-are allocated to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption. Data to perform these allocations appear below: Overhead costs: Equipment depreciation $ 40,250 Supervisory expense $ 4,150 I Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Other Equipment depreciation 0.50 0.30 0.20 Supervisory expense 0.10 0.40 0.50 In the second stage, 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: MHs (Machining) Orders (Order Filling) Product A8 3,800 1,300 Product K2 21,000 3,900 Total 24,800 5,200 The activity rate for the Machining activity cost pool under activity-based costing is closest to: $.82 per MH $.83 per MH $1.78 per MH $.19 per MH

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