Question
Forse Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs
Forse Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity based costing system:
Overhead costs: | ||
Wages and salaries | $ | 175,000 |
Other expenses | 137,000 | |
Total | $ | 312,000 |
Distribution of resource consumption: | ||||
Activity Cost Pools | ||||
Making Bouquets | Delivery | Other | Total | |
Wages and salaries | 50% | 35% | 15% | 100% |
Other expenses | 20% | 70% | 10% | 100% |
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.
The amount of activity for the year is as follows:
Activity Cost Pool | Activity |
Making bouquets | 82,660 bouquets |
Delivery | 16,100 deliveries |
What would be the total overhead cost per bouquet according to the activity based costing system? In other words, what would be the overall activity rate for the making bouquets activity cost pool? (Round your final answer to 2 decimal places)
Multiple Choice
-
$1.44
-
$1.39
-
$1.29
-
$1.37
Betterton Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costsequipment depreciation and supervisory expense-are allocated to three activity cost poolsMachining, Order Filling, and Otherbased on resource consumption. Data to perform these allocations appear below:
Overhead costs: | ||
Equipment depreciation | $ | 53,750 |
Supervisory expense | $ | 7,200 |
|
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 | 0.40 | 0.50 | ||||||
|
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 data for the company's two products follow:
Activity: | MHs (Machining) | Orders (Order Filling) | |||||
Product A8 | 4,400 | 1,900 | |||||
Product K2 | 24,000 | 5,700 | |||||
Total | 28,400 | 7,600 | |||||
|
The activity rate for the Machining activity cost pool under activity-based costing is closest to:
Multiple Choice
-
$2.06 per MH
-
$.96 per MH
-
$.33 per MH
-
$.97 per MH
Forse Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity based costing system:
Overhead costs: | ||
Wages and salaries | $ | 175,000 |
Other expenses | 137,000 | |
Total | $ | 312,000 |
|
Distribution of resource consumption: | ||||
Activity Cost Pools | ||||
Making Bouquets | Delivery | Other | Total | |
Wages and salaries | 50% | 35% | 15% | 100% |
Other expenses | 20% | 70% | 10% | 100% |
|
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.
The amount of activity for the year is as follows:
Activity Cost Pool | Activity |
Making bouquets | 82,660 bouquets |
Delivery | 16,100 deliveries |
What would be the total overhead cost per delivery according to the activity based costing system? In other words, what would be the overall activity rate for the deliveries activity cost pool? (Round your final answer to 2 decimal places)
Multiple Choice
-
$9.76
-
$9.33
-
$10.62
-
$8.05
Radakovich Corporation has provided the following data from its activity-based costing system:
Activity Cost Pools | Total Cost | Total Activity | |||
Assembly | $ | 1,398,250 | 65,800 | machine-hours | |
Processing orders | $ | 69,451 | 2,520 | orders | |
Inspection | $ | 184,800 | 2,400 | inspection-hours | |
|
The company makes 920 units of product F60N a year, requiring a total of 1,290 machine-hours, 61 orders, and 40 inspection-hours per year. The product's direct materials cost is $57.55 per unit and its direct labor cost is $13.56 per unit. The product sells for $123.50 per unit.
According to the activity-based costing system, the product margin for product F60N is: (Round your intermediate calculations to 2 decimal places.)
Multiple Choice
-
$19,105.14
-
$16,025.14
-
$48,198.80
-
$17,706.30
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started