Benoist Corporation has an activity-based costing system withthree activity cost pools-Machining, Setting Up, and Other. Thecompany's overhead costs have already been allocated to the costpools and total $17,200 for the Machining cost pool, $7,700 for theSetting Up cost pool, and $52,100 for the Other cost pool.
Costs in the Machining cost pool are assigned to products based onmachine-hours (MHs) and costs in the Setting Up cost pool areassigned to products based on the number of batches. Costs in theOther cost pool are not assigned to products. Data concerning thetwo products and the company's costs appear below:
Required:
a. Calculate activity rates for each activity cost pool usingactivity-based costing. b. Determine the amount of overhead cost that would be assigned toeach product using activity-based costing. c. Determine the product margins for each product usingactivity-based costing.
Murri Corporation has an activity-based costing system withthree activity cost pools-Processing, Setting Up, and Other. Thecompany's overhead costs, which consist of factory utilities andindirect labor, are allocated to the cost pools in proportion tothe activity cost pools' consumption of resources. Costs in theProcessing cost pool are assigned to products based onmachine-hours (MHs) and costs in the Setting Up cost pool areassigned to products based on the number of batches. Costs in theOther cost pool are not assigned to products. Data concerning thetwo products and the company's costs and activity-based costingsystem appear below:
Factory utilities (total)
$
34,200
Indirect labor (total)
$
12,800
Distribution of Resources Consumption Across ActivityCost Pools
Processing
Settingup
Other
Factoryutilities
0.40
0.30
0.30
Indirect labor
0.20
0.10
0.70
MHs
Batches
Product X7
3,700
1,300
Product L4
7,700
700
Total
11,400
2,000
Product X7
Product L4
Sales (total)
$
78,100
$
101,700
Direct materials(total)
$
22,800
$
38,700
Direct labor(total)
$
35,200
$
41,300
Required:
a.
Assign overhead costs to activity cost pools usingactivity-based costing. (Omit the "$" sign in yourresponse.)
Activity Cost Pools
Processing
Settingup
Other
Total
Factoryutilities
$
$
$
$
Indirect labor
Total
$
$
$
$
b.
Calculate activity rates for each activity cost pool usingactivity-based costing. (Round youranswersto 2 decimal places. Omitthe "$" sign in your response.)
ActivityRate
Processing
$
per MH
Setting up
$
per batch
c.
Determine the amount of overhead cost that would be assigned toeach product using activity-based costing. (Omit the "$"sign in your response.)
Product X7
Product L4
Processing
$
$
Setting up
Total
$
$
d.
Determine the product margins for each product usingactivity-based costing. (Omit the "$" sign in yourresponse.)
Murri Corporation has an activity-based costing system withthree activity cost pools-Processing, Setting Up, and Other. Thecompany's overhead costs, which consist of factory utilities andindirect labor, are allocated to the cost pools in proportion tothe activity cost pools' consumption of resources. Costs in theProcessing cost pool are assigned to products based onmachine-hours (MHs) and costs in the Setting Up cost pool areassigned to products based on the number of batches. Costs in theOther cost pool are not assigned to products. Data concerning thetwo products and the company's costs and activity-based costingsystem appear below:
Factory utilities (total)
$
36,500
Indirect labor (total)
$
11,000
Distribution of Resources Consumption Across ActivityCost Pools
Processing
Settingup
Other
Factoryutilities
0.30
0.20
0.50
Indirect labor
0.50
0.30
0.20
MHs
Batches
Product X7
3,600
1,500
Product L4
7,600
900
Total
11,200
2,400
Product X7
Product L4
Sales (total)
$
70,900
$
100,100
Direct materials(total)
$
25,400
$
37,500
Direct labor(total)
$
32,400
$
44,000
Required:
a.
Assign overhead costs to activity cost pools usingactivity-based costing. (Omit the "$" sign in yourresponse.)
Activity Cost Pools
Processing
Settingup
Other
Total
Factoryutilities
$
$
$
$
Indirect labor
Total
$
$
$
$
b.
Calculate activity rates for each activity cost pool usingactivity-based costing. (Round youranswersto 2 decimal places. Omitthe "$" sign in your response.)
ActivityRate
Processing
$
per MH
Setting up
$
per batch
c.
Determine the amount of overhead cost that would be assigned toeach product using activity-based costing. (Omit the "$"sign in your response.)
Product X7
Product L4
Processing
$
$
Setting up
Total
$
$
d.
Determine the product margins for each product usingactivity-based costing. (Omit the "$" sign in yourresponse.)
Murri Corporation has an activity-based costing system withthree activity cost pools-Processing, Setting Up, and Other. Thecompany's overhead costs, which consist of factory utilities andindirect labor, are allocated to the cost pools in proportion tothe activity cost pools' consumption of resources. Costs in theProcessing cost pool are assigned to products based onmachine-hours (MHs) and costs in the Setting Up cost pool areassigned to products based on the number of batches. Costs in theOther cost pool are not assigned to products. Data concerning thetwo products and the company's costs and activity-based costingsystem appear below:
Factory utilities (total)
$
35,500
Indirect labor (total)
$
9,600
Distribution of Resources Consumption Across ActivityCost Pools
Processing
Settingup
Other
Factoryutilities
0.40
0.50
0.10
Indirect labor
0.40
0.20
0.40
MHs
Batches
Product X7
3,100
1,200
Product L4
7,800
1,000
Total
10,900
2,200
Product X7
Product L4
Sales (total)
$
79,500
$
98,800
Direct materials(total)
$
26,400
$
33,500
Direct labor(total)
$
36,200
$
40,100
Required:
a.
Assign overhead costs to activity cost pools usingactivity-based costing. (Omit the "$" sign in yourresponse.)
Activity Cost Pools
Processing
Settingup
Other
Total
Factoryutilities
$
$
$
$
Indirect labor
Total
$
$
$
$
b.
Calculate activity rates for each activity cost pool usingactivity-based costing. (Round youranswersto 2 decimal places. Omitthe "$" sign in your response.)
ActivityRate
Processing
$
per MH
Setting up
$
per batch
c.
Determine the amount of overhead cost that would be assigned toeach product using activity-based costing. (Omit the "$"sign in your response.)
Product X7
Product L4
Processing
$
$
Setting up
Total
$
$
d.
Determine the product margins for each product usingactivity-based costing. (Omit the "$" sign in yourresponse.)
