6. Groch Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools-Processing, Supervising, and Other. The costs in those activity cost pools appear below: Processing. Supervising.... Other $29,200 $5,700 $22,100 Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below: MHs (Processing) Batches (Supervising) Product H2 Product Q9... 9,800 100 10,200 1,900 Total 20,000 2,000 Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. Product H2 Product Q9 Sales (total).. $97,400 $120,200 Direct materials (total). $32,900 $55,600 Direct labor (total).. $44,600 $41,000 The activity rate for the Supervising activity cost pool under activity-based costing is closest to: A. $3.50 per batch B. $28.50 per batch C. $3.68 per batch D. $2.85 per batch

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 12E: Activity cost pools, activity rates, and product costs using activity-based costing Caldwell Home...
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6. Groch Corporation uses activity-based costing to compute product margins. Overhead
costs have already been allocated to the company's three activity cost pools-Processing,
Supervising, and Other. The costs in those activity cost pools appear below:
Processing.
Supervising....
Other
$29,200
$5,700
$22,100
Processing costs are assigned to products using machine-hours (MHs) and Supervising
costs are assigned to products using the number of batches. The costs in the Other activity
cost pool are not assigned to products. Activity data appear below:
MHs (Processing)
Batches (Supervising)
Product H2
Product Q9...
9,800
100
10,200
1,900
Total
20,000
2,000
Finally, sales and direct cost data are combined with Processing and Supervising costs to
determine product margins.
Product H2
Product Q9
Sales (total)..
$97,400
$120,200
Direct materials (total).
$32,900
$55,600
Direct labor (total)..
$44,600
$41,000
The activity rate for the Supervising activity cost pool under activity-based costing is
closest to:
A. $3.50 per batch
B. $28.50 per batch
C. $3.68 per batch
D. $2.85 per batch
Transcribed Image Text:6. Groch Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools-Processing, Supervising, and Other. The costs in those activity cost pools appear below: Processing. Supervising.... Other $29,200 $5,700 $22,100 Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below: MHs (Processing) Batches (Supervising) Product H2 Product Q9... 9,800 100 10,200 1,900 Total 20,000 2,000 Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. Product H2 Product Q9 Sales (total).. $97,400 $120,200 Direct materials (total). $32,900 $55,600 Direct labor (total).. $44,600 $41,000 The activity rate for the Supervising activity cost pool under activity-based costing is closest to: A. $3.50 per batch B. $28.50 per batch C. $3.68 per batch D. $2.85 per batch
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