Question
Matt Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 8,000 units and
Matt Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 8,000 units and of Product B is 6,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows:
Estimated
Expected Activity
Activity Cost Pool
Cost
Product A
Product B
Total
Activity 1
20,000
100
400
500
Activity 2
37,000
800
200
1,000
Activity 3
91,200
800
3,000
3,800
The cost per unit of Product A under activity-based costing is closest to:
2.40.
3.90.
10.59.
6.60.
Bridget Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 2,000 units and of Product B is 3,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows.
Estimated
Expected Activity
Activity Cost Pool
Cost
Product A
Product B
Total
Activity 1
9,000
400
350
750
Activity 2
12,000
100
400
500
Activity 3
48,000
400
1,200
1,600
The cost per unit of Product A under activity-based costing is closest to:
6.00.
9.60.
8.63.
13.80.
Angel Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:
Activity Cost Pools (and Activity Measures
Estimated
Overhead Cost
Machine related (machine-hours)
81,600
Batch setup (setups).
387,000
General factory (direct labour-hours).
274,800
Expected Activity
Activity Cost Pools
Total
Product X
Product Y
Machine related
8,000
3,000
5,000
Batch setup
10,000
2,000
8,000
General factory
12,000
7,000
5,000
48.40
38.70
74.30
193.50
Angel Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:
Activity Cost Pools (and Activity Measures
Estimated
Overhead Cost
Machine related (machine-hours)
81,600
Batch setup (setups).
387,000
General factory (direct labour-hours).
274,800
Expected Activity
Activity Cost Pools
Total
Product X
Product Y
Machine related
8,000
3,000
5,000
Batch setup
10,000
2,000
8,000
General factory
12,000
7,000
5,000
Assuming that actual activity turns out to be the same as expected activity, the total amount of overhead cost allocated to Product X would be closest to:
371,700
387,000
268,300
149,000
Forrest Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity based costing system:
Overhead costs:
Wages and salaries
70,000
Other expenses.
40,000
Total
110,000
Distribution of resource consumption:
Activity Cost Pools
Making Bouquets
Delivery
Other
Total
Wages and salaries
55%
35%
10%
100%
Other expenses
45%
25%
30%
100%
The 'Other' activity cost pool consists of the costs of idle capacity and organisation-sustaining costs.
The amount of activity for the year is as follows:
Activity Cost Pool
Activity
Making bouquets
20,000 bouquets
Delivery
1,000 deliveries
What would be the total overhead cost per delivery according to the activity based costing system? In other words, what would be the overall activity rate for the deliveries activity cost pool? (Round your answer to the nearest whole pence).
27.50
38.50
33.00
34.50
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Cost Management
Authors: Don R Hansen, Maryanne M Mowen, Dan L Heitger
5th Edition
357141091, 978-0357141090
