11

Zodiac Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:

Activity Cost Pool Activity Rate

Setting up batches $ 59.96 per batch

Processing customer orders $ 73.20 per customer order

Assembling products $ 4.65 per assembly hour

Data concerning two products appear below:

Product A99B Product Z69O

Number of batches 97 68

Number of customer orders 47 61

Number of assembly hours 501 908

How much overhead cost would be assigned to Product A99B using the activity-based costing system? (Round your intermediate calculations and final answers to 2 decimal places.)

A. $104,275.53

* B. $11,586.17

* C. $137.81

* D. $9,097.41

16

Zodiac Corp makes a variety of products that it sells to other businesses. The companys activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that ABC system are listed below:

Activity Cost Pool Activity Measure Activity Rate

Supporting assembly Direct labor-hours (DLHs) $ 5.65 per DLH

Processing batches Number of batches $ 180.00 per batch

Processing orders Number of orders $ 68.55 per order

Serving customers Number of customers $ 2,423.00 per customer

The cost of serving customers, $2,423.00 per customer, is the cost of serving a customer for one year. Aecki Corporation buys only one of the companys products. The details of last years purchases of this product are listed below:

Number of units purchased 900 units

Number of batches 4 batches

Number of orders 1 order

Direct labor-hour requirement 0.20 DLHs per unit

Selling price $ 30.00 per unit

Direct materials cost $ 6.65 per unit

Direct labor cost $ 3.85 per unit

According to the ABC system, the total overhead cost for this customer this past year was closest to:

A. $1,805.55

* B. $4,228.55

* C. $13,678.55

* D. $9,450.00

17

Zodiac Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes.

Fixed Element per Month Variable Element per Container Refurbished

Revenue $4,600

Employee salaries and wages $42,700 $1,100

Refurbishing materials $ 600

Other expenses $29,100

When the company prepared its planning budget at the beginning of July, it assumed that 26 containers would have been refurbished.

The amount shown for revenue in the planning budget for July would have been closest to:

A. $136,300

* B. $119,600

* C. $133,400

* D. $122,200

20

Zodiac Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During December, the company budgeted for 5,300 units, but its actual level of activity was 5,340 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for December:

Data used in budgeting:

Fixed Element per Month Variable element per unit

Revenue $ 0 $30.00

Direct labor $ 0 $3.50

Direct materials 0 10.40

Manufacturing overhead 33,300 1.50

Selling and administrative expenses 25,000 0.50

Total expenses $58,300 $15.90

Actual results for December:

Revenue $156,340

Direct labor $ 17,980

Direct materials $ 56,566

Manufacturing overhead $ 41,040

Selling and administrative expenses $ 28,870

The manufacturing overhead in the flexible budget for December would be closest to:

A. $41,350

* B. $40,733

* C. $41,250

* D. $41,310