Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Vassallo Corporation's activity-based costing system has three cost pools: Machining, Set Up, and Other. The company's overhead costs, which consist of equipment depreciation and indirect

Vassallo Corporation's activity-based costing system has three cost pools: Machining, Set Up, and Other. The company's overhead costs, which consist of equipment depreciation and indirect labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Equipment depreciation $64,000 Indirect labor 4,000 Distribution of Resource Consumption by Cost Pool

Machining Set Up Other Total Equipment depreciation $12,800 $19,200 $32,000 $64,000 Indirect labor 2,000 400 1,600 4,000 Total $14,800 $19,600 $33,600 $68,000

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.

MHs Batches Product R3 3,800 300 Product D6 16,200 700

Additional data concerning the company's products appears below: Product R3 Product D6 Sales $168,700 $185,600 Direct materials 77,800 72,300 Direct labor 75,800 79,300 Required: a) Calculate activity rates for each activity cost pool using ABC. b) Determine the amount of overhead cost that would be assigned to each product using ABC. c) Determine the product margins for each product using ABC.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Wiley CIA Essentials Of Internal Auditing Part 1 Exam Review 2023

Authors: S. Rao Vallabhaneni

1st Edition

1119987148, 978-1119987147

More Books

Students also viewed these Accounting questions