Question
In: Accounting
The Blossum Company has an activity –based costing system with three activity cost pools-Design, Marketing, and...
- The Blossum Company has an activity –based costing system with three activity cost pools-Design, Marketing, and Other. The company’s overhead costs, which consist of equipment depreciation and indirect labor, have been allocated to the cost pools already.
- Costs in the Design cost pool are assigned to products based on Direct Labor Hours (DLH’s) and the costs in the Marketing cost pool are assigned to products based on the number of cases. Costs in the other cost pool are not assigned to products.
- Required
- (1) Calculate activity rates for each activity cost pool using ABC
- (2) Determine the amount of overhead cost that would be assigned to Product Tulips using ABC
- (3) Determine the product margin for Product Tulips using ABC
Activity Based Costing (ABC)
Data Sets
Activity Cost Pools (in dollars)
Category Design Marketing Other Total
Depreciation $30,000 $8,000 $20,000 $58,000
Indirect Labor $5,000 $3,000 $4,000 $12,000
Total $35,000 $11,000 $24,000 $70,000
Category DLHs Cases
Product Tulips 2,500 600
Product Roses 9,500 2,400
Total 12,000 3,000
Activity Cost Pools (in dollars)
Category Tulips Roses
Total Sales 250,000 280,000
Total Direct Materials 60,000 45,000
Total Direct Labor 48,000 98,000
Solutions
ekkarill92 answered 3 years agoRelated Solutions
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