Question

In: Accounting

Data concerning three of the activity cost pools of Salcido LLC, a legal firm, have been...

Data concerning three of the activity cost pools of Salcido LLC, a legal firm, have been provided below:

Activity Cost Pool Total Cost Total Activity
Researching legal issues $ 21,230 690 research hours
Meeting with clients $ 1,205,892 7,353 meeting hours
Preparing documents $ 92,590 5,790 documents
 

The activity rate for the “meeting with clients” activity cost pool is closest to:

Multiple Choice

$72 per meeting hour

$164 per meeting hour

$92 per meeting hour

$1,205,892 per meeting hour

Solutions

Expert Solution

Concepts and reason

Management accounting: Management accounting measures, analyses, and reports financial and nonfinancial information in taking decisions and implementing strategies. Various daily decisions are supported by management accounting. Some of the major uses include accepting potential order, making custom order bid, disposal of a product etc…

Fundamentals

Activity based costing: Overhead allocation under activity based costing is based on cost pools and activity driver. Cost pool divided by activity driver results in allocation rate. Based on the activity usage overhead is allocated using pre-determined allocation rate.

Activity rate is estimated activity cost pool amount divided by total activity. In the given case activity cost pool is “Meeting with clients” and total activity is meeting hours. Below is the formula used:

Activity rate is:

Thus, activity rate is

Ans:

Activity rate for the meeting with clients activity cost pool is $164 per meeting hour.

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Mayeux Corporation uses an activity-based costing system with three activity cost pools.
 Mayeux Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity-based costing system: Costs: Wages and salaries   $ 320,000 Depreciation   160,000 Utilities   240,000 Total  $720,000 Distribution of resource consumption: Activity Cost Pools  How much cost, in total, would be allocated in the first-stage allocation to the Setting Up activity cost pool?A) $360,000 B) $336,000 C) $288,000 D) $348,000
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...
Corporation has an activity-based costing system with three activity cost pools—Processing, Supervising, and Other. In the...
Corporation has an activity-based costing system with three activity cost pools—Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment expense $73,000 Indirect labor $1,000 Distribution of Resource Consumption Across Activity Cost Pools: Processing Supervising Other Equipment expense 20% 10% 70% Indirect labor 20% 20% 60% In...
Diehl Corporation uses an activity-based costing system with three activity cost pools. The company has provided...
Diehl Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system: Costs: Manufacturing overhead $ 480,000 Selling and administrative expenses 100,000 Total $ 580,000 Distribution of resource consumption: Activity Cost Pools Order Size Customer Support Other Total Manufacturing overhead 5% 85% 10% 100% Selling and administrative expenses 60% 20% 20% 100% The "Other" activity cost pool consists of the costs of idle capacity...
Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In...
Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment expense $ 128,000 Indirect labor $ 11,000 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Processing Supervising Other Equipment expense 0.20 0.60 0.20...
Ollivier Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In...
Ollivier Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:   Overhead costs:   Equipment expense $53,000   Indirect labor $6,400 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Processing Supervising Other   Equipment expense 0.50     0.40     0.10...
Part A Hardwood Limited has an activity-based costing system with three activity cost pools: Processing, Setting...
Part A Hardwood Limited has an activity-based costing system with three activity cost pools: Processing, Setting Up, and Other. 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 Other cost pool are not assigned to products. Data concerning the two products and the company's costs and activity-based costing system appear below: Activity cost pools:...
Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In...
Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment expense $ 83,000 Indirect labor $ 8,200 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Processing Supervising Other Equipment expense 0.40 0.50 0.10...
Ollivier Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In...
Ollivier Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:   Overhead costs:   Equipment expense $125,000   Indirect labor $5,200 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Processing Supervising Other   Equipment expense 0.40     0.40     0.20...
Groleau Corporation has an activity-based costing system with three activity cost pools-- Processing, Setting Up, and...
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...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT