Thor Inc., a manufacturer of special use flashlights, is considering using activity-based costing to compute product...
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Thor Inc., a manufacturer of special use flashlights, is considering using activity-based costing to compute product margins, Overhead costs for the just completed quarter have been allocated to the company's three activity cost pools-Assembly, Order Fulfillment, and Other. The costs in those activity cost pools appear below: $58,000 Assembly Order Fulfillment 157.000 Other 55,500 Thar has determined that assembly costs should be assigned to products using direct-labor hours (DLH) and that Order Fulfillment costs should be assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data appear below: DLHS Orders (Assembly) (Order Fulfillment) LE Model 1.900 200 Military Model 8,100 800 Finally, sales and direct cost data should be combined with allocated Assembly and Order Fulfillment costs to determine product margins. LE Model Military Model Sales $641.000 $706,000 Direct Materials 288,000 188,000 Direct Labor 291,000 302,000 What would the product margin for the Military Model have been under activity-based costing? O $169,020 O $43,420 O $90,400 $216,000 Thor Inc., a manufacturer of special use flashlights, is considering using activity-based costing to compute product margins, Overhead costs for the just completed quarter have been allocated to the company's three activity cost pools-Assembly, Order Fulfillment, and Other. The costs in those activity cost pools appear below: $58,000 Assembly Order Fulfillment 157.000 Other 55,500 Thar has determined that assembly costs should be assigned to products using direct-labor hours (DLH) and that Order Fulfillment costs should be assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data appear below: DLHS Orders (Assembly) (Order Fulfillment) LE Model 1.900 200 Military Model 8,100 800 Finally, sales and direct cost data should be combined with allocated Assembly and Order Fulfillment costs to determine product margins. LE Model Military Model Sales $641.000 $706,000 Direct Materials 288,000 188,000 Direct Labor 291,000 302,000 What would the product margin for the Military Model have been under activity-based costing? O $169,020 O $43,420 O $90,400 $216,000
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Computation of Activity rate Activity OH CostsCol 1 No of activ... View the full answer
Related Book For
Managerial accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
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