1) Groleau Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other. The company's overhead costs, which consist of factory utilities and indirect labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Costs in the Processing 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. Data concerning the two products and the company's costs and activity-based costing system appear below: Factory utilities (total) Indirect labor (total) 934,500 916,300 Distribution of Resource Consumption Across Activity Cost Pools Factory utilities Indirect labor Product 88 Product P1 Total Sales (total) Direct materials (total) Direct labor (total) Processing 0.2 0.3 Mils 3,600 7,900 11,500 Setting Up 0.5 0.3 Batches Other 0.3 0.4 1,400 800 2,200 Product 88 Product F1 480, 300 026,500 433,700 $97,800 $36,400 $42,900 c. Determine the amount of overhead cost that would be assigned to each product using activity-based costing. For each Product d. Determine the product margins for each product using activity-based costing
1) Groleau Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other. The company's overhead costs, which consist of factory utilities and indirect labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Costs in the Processing 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. Data concerning the two products and the company's costs and activity-based costing system appear below: Factory utilities (total) Indirect labor (total) 934,500 916,300 Distribution of Resource Consumption Across Activity Cost Pools Factory utilities Indirect labor Product 88 Product P1 Total Sales (total) Direct materials (total) Direct labor (total) Processing 0.2 0.3 Mils 3,600 7,900 11,500 Setting Up 0.5 0.3 Batches Other 0.3 0.4 1,400 800 2,200 Product 88 Product F1 480, 300 026,500 433,700 $97,800 $36,400 $42,900 c. Determine the amount of overhead cost that would be assigned to each product using activity-based costing. For each Product d. Determine the product margins for each product using activity-based costing
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:1) Groleau Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other. The company's overhead costs, which
consist of factory utilities and indirect labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Costs in the Processing
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. Data concerning the two products and the company's costs and activity-based costing system appear below:
Factory utilities (total)
Indirect labor (total)
Distribution of Resource Consumption Across Activity Cost Pools
Factory utilities
Indirect labor
Product 88
Product F1
Total
934,500
916,300
.
Sales (total)
1 Direct materials (total)
Direct labor (total)
Processing
0.2
0.3
MHS
3,600
7,900
11, 500
Setting Up
0.5
0.3
Batches
1,400
ВОО
2,2
Other
0.3
0.4
Product 88 Product F1
997,800
$36,400
$42,900
480,300
026,500
$33,700
c. Determine the amount of overhead cost that would be assigned to each
product using activity-based costing. For each Product
d. Determine the product margins for each product using activity-based
costing.
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