Author Question: Canton Corp. manufactures two sizes of ceramic paperweights, regular and jumbo. The following ... (Read 127 times)

biggirl4568 · **on:** Mar 6, 2021

Canton Corp. manufactures two sizes of ceramic paperweights, regular and jumbo. The following information applies to their expectations for the planning period:

Cost Pool

Overhead Costs

Activity-cost driver

Materials handling

$46,000

97,000 orders

Machine maintenance

$360,000

19,000 maintenance hours

Setups

$258,780

45,400 setups

Inspections

$149,800

21,400 inspections

Total support costs

$814,580

Expected direct costs amounts to $927,000 for the period. Support cost requirements of both products are substantially different from one another. Zitriks uses an ABC costing system.

Which of the following is true of Canton's overhead costing?
◦ Multiple cost pools are appropriate for Canton's because of high direct costs.
◦ Single cost pool is appropriate for Canton's because of high direct costs.
◦ Multiple cost pools are appropriate for Canton's because of diverse support costs.
◦ Single cost pool is appropriate for Canton's because of diverse support costs.

Tabitha_2016 · **Reply #1 on:** Mar 6, 2021

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