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Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting up, and other. The company's overhead costs, which consist or equipment depreciation
Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting up, and other. The company's overhead costs, which consist or equipment depreciation and indirect labor, have been allocated to the cost pools already and are provided in the table below. Activity Cost Pools Machining Setting Up Other Total Equipment depreciation Indirect labor $ 9400 $ 48,700 $ 23,800 $ 81,900 4500 2900 4100 11,500 $ 13,900 $ 51,600 $ 27,900 $ 93.400 Total 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. Data concerning the two products and the company's costs appear below: MHS Batches Product Z3 Product T1 6000 6200 12,200 750 1350 2100 Total Product Z3 Product T1 Sales (total) Direct materials (total) Direct labor (total) $ 230,800 $ 255,500 $ 84,000 $ 97,600 $ 110,000 $ 105,200 Required: Calculate to Activity Rate Calculate the following: Machining Activity Rate Setting up Activity Rate s Amount of OH applied to product Z3 (round to the nearest dollar) Amount of OH applied to product T1 (round to the nearest dollar) Product Margin - Z3 (round to the nearest dollar) Product Margin - T1 (round to the nearest dollar)
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