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Howell Corporation's activity - based costing system has three activity cost pools - - Machining, Setting Up , and Other. The company's overhead costs, which
Howell Corporation's activitybased costing system has three activity cost poolsMachining, Setting Up and Other. The company's overhead costs, which consist of equipment depreciation and indirect labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Equipment depreciation total $ Indirect labor total $ Distribution of Resource Consumption Across Activity Cost Pools Machining Setting Up Other Equipment depreciation Indirect labor Costs in the Machining 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. MHs Batches Product S Product C Total Additional data concerning the company's products appears below: Product S Product C 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.
Howell Corporation's activitybased costing system has three activity cost poolsMachining, Setting Up and Other. The company's overhead costs, which consist of equipment depreciation and indirect labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources.
Equipment depreciation total $
Indirect labor total $
Distribution of Resource Consumption Across Activity Cost Pools
Machining Setting Up Other
Equipment depreciation
Indirect labor
Costs in the Machining 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.
MHs Batches
Product S
Product C
Total
Additional data concerning the company's products appears below:
Product S Product C
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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