Sorice Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been allocated to the company's three activity cost pools as follows: Processing, $20,200; Supervising, $11,000; and Other, $66,800. Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the other activity cost pool are not assigned to products. Activity data appear below: MHS Batches (Processing) (Supervising) 4,800 200 Product 19 Product W7 15,200 20,000 800 1,000 Total The activity rate for the Supervising activity cost pool under activity-based costing is closest to: Multiple Choice 0 $6.00 per batch 0 $11.00 per batch 0 $98.00 per batch 0 $7.50 per batch Scholfield Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that ABC system are listed below: Activity Cost Pool Supporting assembly Processing batches Processing orders Serving customers Activity Measure Direct labor-hours (DLHS) Number of batches Number of orders Number of customers Activity Rate $ 6.55 per DLH $ 138.20 per batch $ 52.60 per order $1,191.00 per customer The cost of serving customers, $1,191.00 per customer, is the cost of serving a customer for one year. Latif Corporation buys only one of the company's products which Scholfield Enterprises sells for $15.60 per unit. Last year Latif Corporation ordered a total of 1,100 units of this product in 2 orders. To fill the orders, 7 batches were required. The direct materials cost is $7.85 per unit and the direct labor cost is $1.90 per unit. Each unit requires 0.10D LHs. According to the ABC system, the total overhead cost for this customer this past year was closest to: Multiple Choice $13,709.10 $2,984.10 $1,793.10 $10,725.00 To compute a product's profit or product margin, the product's sales and direct costs are needed in addition to the overhead costs computed in an activity-based costing system. True or False True False DelauderEnterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that ABC system are listed below: Activity Rate Activity Cost Pool Supporting assembly $ 3.45 per DLH Activity Measure Direct labor-hours (DLHS) Number of batches Number of orders Number of customers Processing batches Processing orders Serving customers $ 193.30 per batch $ 83.05 per order $1,608.00 per customer The cost of serving customers, $1,608.00 per customer, is the cost of serving a customer for one year. Grennon Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below: 1,500 units 5 batches 2 orders Number of units purchased Number of batches Number of orders Direct labor-hour requirement Selling price Direct materials cost Direct labor cost 0.25 DLHs per unit $18.55 per unit $ 8.35 per unit $ 3.95 per unit According to the ABC system, the customer margin for this customer this past year was closest to: Multiple Choice 1 0 $9,375.00 0 $5,340.65 0 $15,300.00 0 $23,790.65
