Groleau Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other....

Transcribed Image Text:

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 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: Factory utilities (total) Indirect labor (total) $ 34,800 $ 9,500 Distribution of Resource Consumption Across Activity Cost Pools Factory utilities Indirect labor Product S8 Product F1 Total Sales (total) Direct materials (total) Direct labor (total) Required: Processing Setting Up Other 0.30 0.50 0.30 0.40 0.40 0.10 MHs 3,200 7,500 10,700 Batches 900 700 1,600 Product S8 $ 72,250 Product F1 $ 98,400 $ 24,600 $ 36,200 $ 32,200 $ 43,900 a. Assign overhead costs to activity cost pools using activity-based costing. b. Calculate activity rates for each activity cost pool using activity-based costing. c. Determine the amount of overhead cost that would be assigned to each product using activity-based costing. d. Determine the product margins for each product using activity-based costing. 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 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: Factory utilities (total) Indirect labor (total) $ 34,800 $ 9,500 Distribution of Resource Consumption Across Activity Cost Pools Factory utilities Indirect labor Product S8 Product F1 Total Sales (total) Direct materials (total) Direct labor (total) Required: Processing Setting Up Other 0.30 0.50 0.30 0.40 0.40 0.10 MHs 3,200 7,500 10,700 Batches 900 700 1,600 Product S8 $ 72,250 Product F1 $ 98,400 $ 24,600 $ 36,200 $ 32,200 $ 43,900 a. Assign overhead costs to activity cost pools using activity-based costing. b. Calculate activity rates for each activity cost pool using activity-based costing. c. Determine the amount of overhead cost that would be assigned to each product using activity-based costing. d. Determine the product margins for each product using activity-based costing.