Zumbrunnen Corporation uses activity-based costing to compute product margins. O
ID: 2415970 • Letter: Z
Question
Zumbrunnen Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools-Processing, Supervising, and Other. The costs in those activity cost pools appear below: Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below: Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. What is the activity rate for the Supervising activity cost pool under activity-based costing closest to? $82.00 per batch $8.00 per batch $26.67 per batch $46.80 per batch Warburton Corporation has two divisions: Alpha and Beta. Data from the most recent month appear below: The company's common fixed expenses total $85,690. What is the break-even in sales dollars for Alpha Division closest to? $162,338 $217,117 $273,623 $420,116Explanation / Answer
TOTAL SUPERVISORY COST = 46800
ALLOCATION OF SUPERVISORY COST ON THE BASIS OF BATCH ALLOCATION
TOTAL BATCHES = 1000
SUPERVISORY COST PER BATCH = 46800/1000 = 46.8
ANSWER IS D
2- ANSWER IS B
SALES 222000 VARIABLE COST 51060 CONTRIBUTION 170940 TOTAL SALES OF COMPANY 222000+229000 451000 FIXED COST 125000 COMMON COST ATTRIBUTED TO ALPHA (COMMON COST/TOTAL SALES)*SALES OF ALPHA 42180 EBIT 45940 TOTAL FIXED COST TO ALPHA 125000+42180 167180 CONTRIBUTION MARGIN 0.77 BREAK EVEN SALES FIXED COST/CONTRIBUTION MARGIN 217116.9Related Questions
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