Item 30

Item 30

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

Activity Cost Pools

Processing	$	56,400
Setting Up	$	13,600
Other	$	28,800

	MHs	Batches
Product D7	8,300	350
Product H0	12,300	950
Total	20,600	1,300

	Product D7		Product H0
Sales (total)	$	216,800	$	302,600
Direct materials (total)	$	72,900	$	145,500
Direct labor (total)	$	106,430	$	96,500

Required:

a. Calculate activity rates for each activity cost pool using activity-based costing.

b. Determine the amount of overhead cost that would be assigned to each product using activity-based costing.

c. Determine the product margins for each product using activity-based costing.

Require A

Machining. per MH

Setting up. per batch

require b amount if overhead cost

product d7

product h10

require c

product h7

product h10