#6

Younan Corporation manufactures two products: Product E47F and Product D02M. The company is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products E47F and D02M.

Activity Cost Pool	Activity Measure	Total Cost		Total Activity
Machining	Machine-hours	$	165,000	11,000	MHs
Machine setups	Number of setups	$	150,000	250	setups
Product design	Number of products	$	70,000	2	products
Order size	Direct labor-hours	$	310,000	10,000	DLHs

Activity Measure	Product E47F	Product D02M
Machine-hours	5,000	6,000
Number of setups	200	50
Number of products	1	1
Direct labor-hours	4,000	6,000

Using the ABC system, the percentage of the total overhead cost that is assigned to Product D02M is closest to:

rev: 03_17_2018_QC_CS-119201

22.30%

49.06%

26.76%

50.00%

#7

Tomasini Corporation has provided the following data from its activity-based costing accounting system:

Supervisory wages	$	660,000
Factory supplies	$	280,000

Distribution of Resource Consumption across Activity Cost Pools:

Activity Cost Pools	Batch Processing	Unit Processing		Other	Total
Supervisory wages	20%	70%		10%	100%
Factory supplies	45%	35%		20%	100%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.

How much supervisory wages and factory supplies cost would NOT be assigned to products using the activity-based costing system?

Garrison 16e Rechecks 2018-07-24

$280,000

$660,000

$122,000

$0

#9

Addleman 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:

	Activity Cost Pools
	Processing	Supervising		Other
Equipment expense	0.20	0.10		0.70
Indirect labor	0.20	0.20		0.60

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 for the company's two products follow:

Activity:

	MHs (Processing)	Batches (Supervising)
Product W3	7,600	100
Product H3	2,400	900
Total	10,000	1,000

Finally, the costs of Processing and Supervising are combined with the following sales and direct cost data to determine product margins.

Sales and Direct Cost Data:

	Product W3		Product H3
Sales (total)	$	159,500	$	154,100
Direct materials (total)	$	66,300	$	55,300
Direct labor (total)	$	77,800	$	84,100

The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

Garrison 16e Rechecks 2018-07-24

$7.50 per batch

$74.00 per batch

$1.11 per batch

$1.00 per batch