31. Houseal Corporation has provided the following data from its activity-based

Question

31. Houseal Corporation has provided the following data from its activity-based costing system:

Data concerning one of the company's products, Product W58B, appear below:

According to the activity-based costing system, the product margin for product W58B is:

2. 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:

Distribution of Resource Consumption Across Activity Cost Pools:

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:

Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.

Sales and Direct Cost Data:

The activity rate for the Machining activity cost pool under activity-based costing is closest to:

3. In time-based activity-based costing, the practical capacity percentage is an estimate of the company’s capacity in relation to its closest competitor. true or false

Activity Cost Pool Total Cost Total Activity Assembly $ 613,250 55,000 machine-hours Processing orders $ 46,170 1,500 orders Inspection $ 146,110 1,900 inspection-hours

Explanation / Answer

Answer 1 Computation of product margin for Product W58B Sales [$113.70 *360 units] $40,932.00 Less : Product costs - Direct Materials [$48.14 * 360 units] $17,330.40 - Direct Labor [$11.62 * 360 units] $4,183.20 - Overhead costs Assembly [$11.15 * 1040 machine hours] $11,596.00 Processing order [$30.78 * 60 orders] $1,846.80 Inspection [$76.90 * 30 inspection hours] $2,307.00 Total Product Costs $37,263.40 Product Margin for Product W58B $3,668.60 Working Calculation of activity rates Assembly activity = Total cost / no.of machine hours = $613250 / 55000 machine hours = $11.15 per machine hour Processing order activity = Total cost / no.of orders = $46,170 / 1500 orders = $30.78 per order Inspection activity = Total cost / no.of inspection hours = $146110 / 1900 inspection hours = $76.90 per inspection hour Answer 2 Determination of activity rate for the Machining activity cost pool under activity-based costing Stage 1 Allocation of overhead costs among machining activity Machining Equipment depreciation [$92000 * 60%] $55,200.00 Supervisory Expenses [$4000 * 30%] $1,200.00 Total Overhead cost of Machining activity $56,400.00 Stage 2 Activity rate of Machining activity = Total Overhead cost / Total machine hours Activity rate of Machining activity = $56,400 / 20000 machine hours = $2.82 per machine hour Answer 3 The answer is False.

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.