Question
In: Accounting
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 are not assigned to products. Activity data appear below:
| MHs (Machining) |
Orders (Order Filling) | |
| Product O4 | 3,500 | 260 |
| Product S1 | 11,300 | 1,220 |
Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.
| Product O4 | Product S1 | |||
| Sales (total) | $ | 96,100 | $ | 102,600 |
| Direct materials (total) | $ | 44,800 | $ | 34,000 |
| Direct labor (total) | $ | 37,100 | $ | 38,200 |
What is the overhead cost assigned to Product S1 under activity-based costing? (Round the Intermediate calculation to two decimal places and your final answer to nearest whole dollar.)
Solutions
Expert Solution
Answer-----------$29,468
Working
| Calculation of Activity rates | |||||
| Activity Cost Pool | Activity driver | Overhead Cost (A) | Expected Activity (B) | Activity rate (A/B) | |
| Machining | Number of MHs | $ 10,952 | 14800 | $ 0.74 | Per MH |
| Order filling | Number of Orders | $ 25,604 | 1480 | $ 17.30 | Per Order |
.
| Cost assigned to Product S1 | |||
| Activity name | Activity Rates | Activity | ABC Cost |
| (A) | (B) | (A x B) | |
| Machining | $ 0.74 | 11,300.00 | $ 8,362.00 |
| Order filling | $ 17.30 | 1,220.00 | $ 21,106.00 |
| Total Overheads assigned | $ 29,468.00 | ||
ekkarill92 answered 2 years agoRelated Solutions
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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:
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