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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 of 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 of equipment depreciation and indirect labor, have been allocated to the cost pools already and are provided in the table below. Equipment depreciation Indirect labor Total Activity Cost Pools Machining Setting Up Other $ 9,200 $ 48,200 $ 23,600 4,200 2,800 4,000 $ 13,400 $ 51,000 $ 27,600 Total $ 81,000 11,000 $ 92,000 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: Batches 700 Product Z3 Product T1 MHS 5,900 6,100 12,000 1,300 Total 2,000 Sales (total) Direct materials (total) Direct labor (total) Product Z3 $ 228,800 $ 83,500 $ 109,800 Product T1 $ 254,500 $ 97,400 $ 104,700 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. Complete this question by entering your answers in the tabs below. Required A Required B Required c Calculate activity rates for each activity cost pool using activity-based costing. (Round your answers to 2 decimal places.)
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