Question
In: Accounting
Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to...
Mirabile 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 | $ | 5,170 |
| Supervising | $ | 31,640 |
| Other | $ | 11,900 |
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:
| MHs (Processing) |
Batches (Supervising) |
|
| Product M0 | 10,400 | 700 |
| Product M5 | 600 | 700 |
| Total | 11,000 | 1,400 |
Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.
| Product M0 | Product M5 | |||
| Sales (total) | $ | 84,700 | $ | 97,400 |
| Direct materials (total) | $ | 30,000 | $ | 32,900 |
| Direct labor (total) | $ | 29,300 | $ | 43,200 |
What is the overhead cost assigned to Product M5 under activity-based costing?
2.
Meester Corporation has an activity-based costing system with three activity cost pools--Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to three activity cost pools based on resource consumption. Data used in the first stage allocations follow:
Overhead costs:
| Equipment depreciation | $ | 87,000 | |||||
| Supervisory expense | $ | 9,400 | |||||
Distribution of Resource Consumption Across Activity Cost Pools:
| Activity Cost Pools | |||||
| Machining | Order Filling | Other | |||
| Equipment depreciation | 0.60 | 0.30 | 0.10 | ||
| Supervisory expense | 0.60 | 0.20 | 0.20 | ||
Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:
Activity:
| MHs (Machining) | Orders (Order Filling) | |
| Product M0 | 1,510 | 1,030 |
| Product H2 | 9,030 | 2,250 |
| Total | 10,540 | 3,280 |
The activity rate for the Order Filling activity cost pool under activity-based costing is closest to:
Solutions
Expert Solution
| Answer: |
| 1) |
| Processing Activity Based rate per MH = $ 5,170 / 11,000 = $ 0.47 |
| Supervising Activity Based rate per batch = $ 31,640 / 1,400 = $ 22.60 |
| Processing Activity Based Cost for Product M5 = $ 0.47 x 600 = $ 282 |
| Supervising Activity Based Cost for Product M5 = $ 22.60 x 700 = $ 15,820 |
| Total overhead cost = $ 282 + $ 15,820 = $ 16,102 |
| Overhead cost assigned to Product M5 under activity-based costing = $ 16,102 |
| 2) |
|
Equipment depreciation allocated to
Order Filling = $ 87,000 x 0.30 = $ 26,100 |
|
Supervisory expense allocated to Order
Filling = $ 9,400 x 0.20 = $ 1,880 |
| Total overhead Cost = $ 26,100 + $ 1,880 = $ 27,980 |
|
Order filling Activity rate
= Total overhead Cost / Total Orders = $ 27,980 / 3,280 = $ 8.53 |
| Order filling Activity rate = $ 8.53 |
ekkarill92 answered 2 years agoRelated Solutions
Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to...
Mirabile 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
$
5,945
Supervising
$
19,680
Other
$
11,300
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...
Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to...
Mirabile 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
$
5,945
Supervising
$
19,680
Other
$
11,300
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...
Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to...
Mirabile 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
$
4,025
Supervising
$
30,420
Other
$
10,700
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...
Hyundai Corporation uses activity-based costing to compute its product margins. Overhead costs have already been allocated...
Hyundai Corporation uses activity-based costing to compute its
product margins. Overhead costs have already been allocated to the
company's three activity cost pools--Machining, Order Filling, and
Other. The data related to those costs in the activity cost pools
appears below:
Machining
$
10,952
Order Filling
$
25,604
Other
$
7,100
Machining costs are assigned to products using machine-hours
(MHs) and Order Filling costs are assigned to products using the
number of orders. The costs in the Other activity cost pool...
Wedd Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been...
Wedd Corporation uses activity-based costing to assign overhead
costs to products. Overhead costs have already been allocated to
the company's three activity cost pools as follows: Processing,
$46,700; Supervising, $33,600; and Other, $24,200. 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:
MHs (Processing)
Batches (Supervising)
Product O6
18,400
1,250
Product...
Umanzor Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been...
Umanzor Corporation uses activity-based costing to assign
overhead costs to products. Overhead costs have already been
allocated to the company's three activity cost pools as follows:
Processing, $50,500; Supervising, $28,600; and Other, $24,700.
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:
MHs
(Processing)
Batches
(supervising)
Product S5
10,900
1,420
Product...
Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing...
Doede Corporation uses activity-based costing to compute product
margins. In the first stage, the activity-based costing system
allocates two overhead accounts--equipment depreciation and
supervisory expense--to three activity cost pools--Machining, Order
Filling, and Other--based on resource consumption. Data to perform
these allocations appear below:
Overhead costs:
Equipment depreciation
$
82,000
Supervisory expense
$
12,100
Distribution of Resource Consumption Across Activity Cost
Pools:
Activity Cost Pools
Machining
Order Filling
Other
Equipment depreciation
0.60
0.30
0.10
Supervisory expense
0.60
0.20
0.20
In the...
Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing...
Doede Corporation uses activity-based costing to compute product
margins. In the first stage, the activity-based costing system
allocates two overhead accounts--equipment depreciation and
supervisory expense--to three activity cost pools--Machining, Order
Filling, and Other--based on resource consumption. Data to perform
these allocations appear below:
Overhead costs:
Equipment depreciation
$
30,000
Supervisory expense
$
14,800
Distribution of Resource Consumption Across Activity Cost
Pools:
Activity Cost Pools
Machining
Order Filling
Other
Equipment depreciation
0.50
0.40
0.10
Supervisory expense
0.50
0.30
0.20
In the...
Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing...
Doede Corporation uses activity-based costing to compute product
margins. In the first stage, the activity-based costing system
allocates two overhead accounts--equipment depreciation and
supervisory expense--to three activity cost pools--Machining, Order
Filling, and Other--based on resource consumption. Data to perform
these allocations appear below:
Overhead costs:
Equipment depreciation
$
103,000
Supervisory expense
$
13,100
Distribution of Resource Consumption Across Activity Cost
Pools:
Activity Cost Pools
Machining
Order Filling
Other
Equipment depreciation
0.60
0.20
0.20
Supervisory expense
0.60
0.10
0.30
In the...
Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing...
Doede Corporation uses activity-based costing to compute product
margins. In the first stage, the activity-based costing system
allocates two overhead accounts--equipment depreciation and
supervisory expense--to three activity cost pools--Machining, Order
Filling, and Other--based on resource consumption. Data to perform
these allocations appear below:
Overhead costs:
Equipment depreciation
$
92,000
Supervisory expense
$
4,000
Distribution of Resource Consumption Across Activity Cost
Pools:
Activity Cost Pools
Machining
Order Filling
Other
Equipment depreciation
0.60
0.20
0.20
Supervisory expense
0.30
0.20
0.50
In the...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Singh Development Co. is deciding whether to proceed with Project X. The cost would be $12...
- CS2123 Data Structures - Fall 2019 Assignment 1: Function Runtimes Table Due 9/11/19 by 11:59pm Completing...
- Question 2. Design a 16-1 MUX using any number of lower MUXs, such as 8-1 or...
- . Write a function that takes, as arguments, two objects, value1 and value2. If
- Wii Brothers, a game manufacturer, has a new idea for an adventure game. It can market...
- Consider the distillation of ethanol (C2H5OH) and the combustion of ethanol . Use a bullet point...
- 1.How does Economic exposure to exchange rate movements affect the capital budgeting of a firm? Provide...
ADVERTISEMENT