Matt Company uses activity-based costing. The company has two products: A and B. The annual production and
Question:
Matt Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 9,000 units and of Product B is 8,000 units. There are three activity cost pools, with total cost and total activity as follows: |
Total Activity | ||||
Activity Cost Pool | Total Cost | Product A | Product B | Total |
Activity 1 | $31,000 | 100 | 520 | 620 |
Activity 2 | $46,287 | 860 | 250 | 1,110 |
Activity 3 | $156,750 | 840 | 3,910 | 4,750 |
The activity-based costing cost per unit of Product A is closest to: (Round your intermediate calculations to 2 decimal places.) |
2. Spendlove Corporation has provided the following data from its activity-based costing system: |
Activity Cost Pool | Total Cost | Total Activity | |
Assembly | $1,398,250 | 65,800 | machine-hours |
Processing orders | $69,451.20 | 2,520 | orders |
Inspection | $184,800 | 2,400 | inspection-hours |
The company makes 920 units of product S78N a year, requiring a total of 1,290 machine-hours, 61 orders, and 40 inspection-hours per year. The product's direct materials cost is $57.55 per unit and its direct labor cost is $13.56 per unit. The product sells for $123.50 per unit. |
According to the activity-based costing system, the product margin for product S78N is: (Round your intermediate calculations to 2 decimal places.) |
3. Activity rates from Quattrone Corporation's activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products: |
Activity Cost Pools | Activity Rate | |
Processing customer orders | $89.95 | per customer order |
Assembling products | $2.31 | per assembly hour |
Setting up batches | $51.23 | per batch |
Last year, Product F76D involved 2 customer orders, 436 assembly hours, and 22 batches. How much overhead cost would be assigned to Product F76D using the activity-based costing system? |
Process Dynamics And Control
ISBN: 978-0471000778
2nd Edition
Authors: Dale E. Seborg, Thomas F. Edgar, Duncan A. Mellich