Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system
allocates two overhead accounts--equipment depreciation and supervisory expense--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 $ 23,000 Supervisory expense $ 12,000 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Other Equipment depreciation 0.60 0.20 0.20 Supervisory expense 0.60 0.10 0.30 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: MHs (Machining) Orders (Order Filling) Product W1 6,250 145 Product M0 23,400 1,000 Total 29,650 1,145 Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins. Sales and Direct Cost Data: Product W1 Product M0 Sales (total) $ 67,200 $ 63,300 Direct materials (total) $ 31,700 $ 15,600 Direct labor (total) $ 23,100 $ 31,300 What is the overhead cost assigned to Product W1 under activity-based costing
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