Howell Corporation's activity-based costing system has three activity cost pools--Machining, Setting Up, and Other. The company's...
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Howell Corporation's activity-based costing system has three activity cost pools--Machining, Setting 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 (total) Indirect labor (total) $27,200 $ 7,840 Distribution of Resource Consumption Across Activity Cost Pools Equipment depreciation Indirect labor Setting Machining 0.40 Up Other 0.30 0.30 0.40 0.30 0.30 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. Product S4 Product Co Total MHs Batches 13,200 7,000 400 1,200 20,200 1,600 Additional data concerning the company's products appears below: Sales (total) Direct materials (total) Direct labor (total) Product S4 Product Co $81,400 $27,000 $ 81,500 $ 28,400 $37,100 $ 32,600 Required: a. Assign overhead costs to activity cost pools using activity-based costing. b. Calculate activity rates for each activity cost pool using activity-based costing. c. Determine the amount of overhead cost that would be assigned to each product using activity-based costing. d. Determine the product margins for each product using activity-based costing. Howell Corporation's activity-based costing system has three activity cost pools--Machining, Setting 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 (total) Indirect labor (total) $27,200 $ 7,840 Distribution of Resource Consumption Across Activity Cost Pools Equipment depreciation Indirect labor Setting Machining 0.40 Up Other 0.30 0.30 0.40 0.30 0.30 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. Product S4 Product Co Total MHs Batches 13,200 7,000 400 1,200 20,200 1,600 Additional data concerning the company's products appears below: Sales (total) Direct materials (total) Direct labor (total) Product S4 Product Co $81,400 $27,000 $ 81,500 $ 28,400 $37,100 $ 32,600 Required: a. Assign overhead costs to activity cost pools using activity-based costing. b. Calculate activity rates for each activity cost pool using activity-based costing. c. Determine the amount of overhead cost that would be assigned to each product using activity-based costing. d. Determine the product margins for each product using activity-based costing.
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Related Book For
Management Accounting
ISBN: 9780077185534
6th Edition
Authors: Will Seal, Carsten Rohde, Ray Garrison, Eric Noreen
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