Question
In: Accounting
Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and Other....
Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and Other. The company's overhead costs, which consist of equipment depreciation and indirect labor, have been allocated to the cost pools already and are provided in the table below.
Activity Cost Pools
Machining
Setting Up
Other
Total
Equipment depreciation
$
9400
$
48,700
$
23,800
$
81,900
Indirect labor
4500
2900
4100
11,500
Total
$
13,900
$
51,600
$
27,900
$
93,400
Costs in the Machining 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 appear below:
MHs
Batches
Product Z3
6000
750
Product T1
6200
1350
Total
12,200
2100
Product Z3 Product T1
Sales (total)
$
230,800
$
255,500
Direct materials (total)
$
84,000
$
97,600
Direct labor (total)
$
110,000
$
105,200
Required:
Calculate the following:
Machining Activity Rate
$
Setting up Activity Rate
$
Amount of OH applied to product Z3 (round to the nearest dollar)
$
Amount of OH applied to product T1 (round to the nearest
dollar)
$
Product Margin – Z3 (round to the nearest dollar)
$
Product Margin – T1 (round to the nearest dollar)
$
Solutions
Expert Solution
Machining Activity Rate Calculation
|
Equipment depreciation |
$ 9,400.00 |
|
Indirect labor |
$ 4,500.00 |
| Total Overhead | $ 13,900.00 |
| Machine Hour | 12,200.00 |
| Activity Rate | $ 1.14 |
Setting up Activity rate Calculation
|
Equipment depreciation |
$ 48,700.00 |
|
Indirect labor |
$ 2,900.00 |
| Total Overhead | $ 51,600.00 |
| Batches | 2,100.00 |
| Activity Rate | $ 24.57 |
| Product Z3 | |
| Machining | $ 6,836 |
| Setting up | $ 18,429 |
| Total Overhead Applied | $ 25,265 |
| Product T11 | |
| Machining | $ 7,064 |
| Setting up | $ 33,171 |
| Total Overhead Applied | $ 40,235 |
| Product Z3 | |
| Sales | $ 230,800.00 |
| Direct materials | $ 84,000.00 |
| Direct labor | $ 110,000.00 |
| Overhead | $ 25,264.64 |
| Product Margin | $ 11,535.36 |
| Product T11 | |
| Sales | $ 255,500.00 |
| Direct materials | $ 97,600.00 |
| Direct labor | $ 105,200.00 |
| Overhead | $ 40,235.36 |
| Product Margin | $ 12,464.64 |
ekkarill92 answered 5 months agoRelated Solutions
Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and Other....
Musich Corporation has an activity-based costing system with
three activity cost pools--Machining, Setting Up, and Other. The
company's overhead costs, which consist of equipment depreciation
and indirect labor, have been allocated to the cost pools already
and are provided in the table below.
Activity
Cost Pools
Machining
Setting Up
Other
Total
Equipment depreciation
$
9400
$
48,700
$
23,800
$
81,900
Indirect labor
4500
2900
4100
11,500
Total
$
13,900
$
51,600
$
27,900
$
93,400
Costs in the Machining...
3. Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and...
3.
Musich Corporation has an activity-based costing system with
three activity cost pools--Machining, Setting Up, and Other. The
company's overhead costs, which consist of equipment depreciation
and indirect labor, have been allocated to the cost pools already
and are provided in the table below.
Activity
Cost Pools
Machining
Setting Up
Other
Total
Equipment depreciation
$
8800
$
47,200
$
23,200
$
79,200
Indirect labor
3600
2600
3800
10,000
Total
$
12,400
$
49,800
$
27,000
$
89,200
Costs in the...
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overhead costs have already been allocated to these cost pools as
follows:
Machining
$
15, 200
Setting up
$
44,800
Other
$
16,000
Costs in the Machining cost pool are assigned to products based
on machine-hours (MHs) and costs in the Setting Up cost pool are
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Howell Corporation's activity-based costing system has three
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and indirect labor, are allocated to the cost pools in proportion
to the activity cost pools' consumption of resources. Equipment
depreciation (total) $ 27,000 Indirect labor (total) $ 7,000
Distribution of Resource Consumption Across Activity Cost Pools
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Greife Corporation's activity-based costing system has three
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company's overhead costs have already been allocated to these cost
pools as follows:
Machining
$
34,122
Setting Up
$
73,005
Other
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Costs in the Machining 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...
Howell Corporation's activity-based costing system has three activity cost pools--Machining, Setting Up, and Other. The company's...
Howell Corporation's activity-based costing system has three
activity cost pools--Machining, Setting Up, and Other. The
company's overhead costs, which consist of equipment depreciation
and indirect labor, are allocated to the cost pools in proportion
to the activity cost pools' consumption of resources.
Equipment depreciation (total)
$
27,500
Indirect labor (total)
$
7,500
Distribution of Resource Consumption Across Activity Cost
Pools
Machining
Setting Up
Other
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0.30
0.20
0.50
Indirect labor
0.40
0.40
0.20
Costs in the Machining cost pool...
Groleau Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other....
Groleau 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
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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...
Moorman Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other....
Moorman Corporation has an activity-based costing system with
three activity cost pools--Processing, Setting Up, and Other. The
company's overhead costs consist of equipment depreciation and
indirect labor and are allocated to the cost pools in proportion to
the activity cost pools' consumption of resources. Equipment
depreciation totals $66,000 and indirect labor totals $4,000. Data
concerning the distribution of resource consumption across activity
cost pools appear below:
Processing
Setting Up
Other
Equipment depreciation
0.50
0.15
0.35
Indirect labor
0.40
0.30
0.30
Moorman Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other....
Moorman Corporation has an activity-based costing system with
three activity cost pools--Processing, Setting Up, and Other. The
company's overhead costs consist of equipment depreciation and
indirect labor and are allocated to the cost pools in proportion to
the activity cost pools' consumption of resources. Equipment
depreciation totals $66,000 and indirect labor totals $4,000. Data
concerning the distribution of resource consumption across activity
cost pools appear below:
Processing
Setting Up
Other
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0.50
0.15
0.35
Indirect labor
0.40
0.30
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Groleau Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other....
Groleau 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
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