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Groleau Corporation has an activity - based costing system with three activity cost pools - - Processing, Setting Up , and Other. The company's overhead
Groleau Corporation has an activitybased costing system with three activity cost poolsProcessing, 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 machinehours 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 activitybased costing system appear below: Factory utilities total $ Indirect labor total $ Distribution of Resource Consumption Across Activity Cost Pools Processing Setting Up Other Factory utilities Indirect labor MHs Batches Product S Product F Total Product S Product F Sales total $ $ Direct materials total $ $ Direct labor total $ $ Required: a Assign overhead costs to activity cost pools using activitybased costing. b Calculate activity rates for each activity cost pool using activitybased costing. c Determine the amount of overhead cost that would be assigned to each product using activitybased costing. d Determine the product margins for each product using activitybased costing.
Groleau Corporation has an activitybased costing system with three activity cost poolsProcessing, 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 machinehours 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 activitybased costing system appear below:
Factory utilities total $
Indirect labor total $
Distribution of Resource Consumption Across Activity Cost Pools
Processing Setting Up Other
Factory utilities
Indirect labor
MHs Batches
Product S
Product F
Total
Product S Product F
Sales total $ $
Direct materials total $ $
Direct labor total $ $
Required:
a Assign overhead costs to activity cost pools using activitybased costing.
b Calculate activity rates for each activity cost pool using activitybased costing.
c Determine the amount of overhead cost that would be assigned to each product using activitybased costing.
d Determine the product margins for each product using activitybased costing.
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