Problem:
1. Fields & Maaner PLC, a consulting firm, uses an activity-based costing in which there are three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system:
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Costs:
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Wages and salaries
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$560,000
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Travel expenses
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140,000
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Other expenses
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140,000
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Total
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$840,000
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2. Distribution of resource consumption:
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Working On
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Business
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|
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Activity Cost Pools
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Engagements
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Development
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Other
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Total
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Wages and salaries
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45%
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25%
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30%
|
100%
|
|
Travel expenses
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60%
|
30%
|
10%
|
100%
|
|
Other expenses
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30%
|
30%
|
40%
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100%
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Required:
a. How much cost, in total, would be allocated to the Working On Engagements activity cost pool?
b. How much cost, in total, would be allocated to the Business Development activity cost pool?
c. How much cost, in total, would be allocated to the Other activity cost pool?