Murri Corporation has an activity-based costing system with three activity cost

Question

Murri Corporation has an activity-based costing system with three activity cost pools-Processing, Setting Up, and Other. The company's overhead costs, which consist of factory utilities and indirect labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Costs in the Processing cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. Data concerning the two products and the company's costs and activity-based costing system appear below:

Assign overhead costs to activity cost pools using activity-based costing. (Omit the "$" sign in your response.)

Calculate activity rates for each activity cost pool using activity-based costing. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Determine the amount of overhead cost that would be assigned to each product using activity-based costing. (Omit the "$" sign in your response.)

Determine the product margins for each product using activity-based costing. (Omit the "$" sign in your response.)

Factory utilities (total) $ 35,500 Indirect labor (total) $ 9,600

Explanation / Answer

(a) Statement showing assignment of Overhead cost to activity cost pools

(b) Statement showing computation of activity rates

(c) Statement showing overhead cost assigned to each product

(d) Computatuon of product margin

Particulars Processing Setting up Others Fatories utility (40:50:10) 14200 17750 3550 Indirect labour(40:20:40) 3840 1920 3840 Total 18040 19670 7390

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