Question

In: Accounting

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 second stage, 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:

MHs
(Machining)
Orders
(Order Filling)
Product W1 6,270 104
Product M0 18,800 984
Total 25,070 1,088

Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.

Sales and Direct Cost Data:

Product W1 Product M0
Sales (total) $ 73,700 $ 67,500
Direct materials (total) $ 34,300 $ 15,200
Direct labor (total) $ 18,000 $ 34,800

What is the overhead cost assigned to Product W1 under activity-based costing?

Solutions

Expert Solution

Distribution of Resource Consumption Across Activity Cost Pools:
Activity Cost Pools
Total Machining Workings Order Filling Workings Other Workings
Equipment depreciation      103,000        61,800 (103,000 x 0.6/1)          20,600 (103,000 x 0.2/1)        20,600 (103,000 x 0.2/1)
Supervisory expense         13,100          7,860 (13,100 x 0.6/1)             1,310 (13,100 x 0.1/1)          3,930 (13,100 x 0.3/1)
     116,100        69,660          21,910        24,530
The overhead cost assigned to Product W1 under activity-based costing
Product W1
Machining    17,421.95 (69,660 x 6,270 ) /25,070
Order Filling      2,094.34 (21,910 x 104 )/ 1,088
Total 19,516.28

Related Solutions

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 $ 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...
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 $ 73,000 Supervisory expense $ 10,900 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 $ 110,000 Supervisory expense $ 6,900 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Other Equipment depreciation 0.40 0.30 0.30 Supervisory expense 0.40 0.20 0.40 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 $ 95,000 Supervisory expense $ 10,300 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 $ 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...
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...
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 $ 74,000 Supervisory expense $ 6,800 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Other Equipment depreciation 0.40 0.30 0.30 Supervisory expense 0.40 0.20 0.40 In the...
Vontungeln Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing...
Vontungeln 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 $64,000 Supervisory expense $ 4,000 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Other Equipment depreciation 0.50 0.30 0.20 Supervisory expense 0.10 0.10 0.80 In the second...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT