Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Howell Corporation's activity-based costing system has three activity cost pools--Machining, Setting Up, and Other. The company's overhead costs, which consist of equipment depreciation and

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Howell Corporation's activity-based costing system has three activity cost pools--Machining, 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) $ 30,000 $ 7,200 Distribution of Resource Consumption Across Activity Cost Pools Equipment depreciation Indirect labor Machining 0.30 0.30 Setting Up Other 0.30 0.50 0.40 0.20 Costs in the Machining 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. Product S4 Product Co Total MHs 15,700 Batches 100 6,500 22,200 1,200 1,300 Additional data concerning the company's products appears below: Product S4 Sales (total) $ 75,500 Product Co $ 75,600 Direct materials (total) $ 27,700 $ 24,200 Direct labor (total) $ 36,300 $ 32,400 Required: 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. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Assign overhead costs to activity cost pools using activity-based costing. Activity Cost Pools Machining Setting Up Other Total Equipment depreciation Indirect labor Total Required A Required B Required C Required D Calculate activity rates for each activity cost pool using activity-based costing. (Round your answers to 2 decimal places.) Activity Cost Pools Machining Setting up Activity Rate per MH per batch Required A Required B Required C Required D Determine the amount of overhead cost that would be assigned to each product using activity-based costing. (Round intermediate calculations to 2 decimal places.) Amount of Overhead Cost Product S4 Product CO Required A Required B Required C Required D Determine the product margins for each product using activity-based costing. (Round intermediate calculations to 2 decimal places.) Product Margin Product S4 Product CO

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting

Authors: Will Seal, Carsten Rohde, Ray Garrison, Eric Noreen

6th Edition

0077185536, 978-0077185534

More Books

Students also viewed these Accounting questions

Question

=+b) Would you use this model? Explain.

Answered: 1 week ago