Durban Metal Products makes specialty metal parts and uses activity-based costing for internal decision-making purposes. The company has four activity cost pools as follows: Activity Cost Pool Order size Customer orders Product testing Selling Activity Measure Number of direct labor-hours Number of customer orders Number of testing hours Number of sales calls The company's owner wants to know the cost of a customer order requiring 200 direct labor-hours, 11 hours of product testing, and 5 sales calls. Required: What is the total overhead cost assigned to this order? Activity Cost Pool Order size Customer orders Product testing Selling Total overhead cost Activity Rate $17.90 per direct labor-hour $ 351.00 per customer order $77.00 per testing hour $ 1,496.00 per sales call ABC Cost

Durban Metal Products makes specialty metal parts and uses activity-based costing for internal decision-making purposes. The company has four activity cost pools as follows: Activity Cost Pool Order size Customer orders Product testing Selling Activity Measure Number of direct labor-hours Number of customer orders Number of testing hours Number of sales calls The company's owner wants to know the cost of a customer order requiring 200 direct labor-hours, 11 hours of product testing, and 5 sales calls. Required: What is the total overhead cost assigned to this order? Activity Cost Pool Order size Customer orders Product testing Selling Total overhead cost Activity Rate $17.90 per direct labor-hour $ 351.00 per customer order $77.00 per testing hour $ 1,496.00 per sales call ABC Cost

Name: Durban Metal Products makes specialty metal parts and uses activity-b
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Description: Durban Metal Products makes specialty metal parts and uses activity-based costing for internal decision-making purposes. Thecompany has four activity cost pools as follows:Activity Cost PoolOrder sizeCustomer ordersProduct testingSellingActivity Mea

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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XYZ Co. currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers. Data on the cost pools and respective driver volumes follow. Product Pool No.1 (Driver: Pool No. 2 (Driver: SU) Pool No. 3 (Driver: PC) DLH) Zeta 1,200 55 2,250 Beta 2,800 45 750 Pool Cost $160,000 $280,000 $360,000 The overhead cost allocated to Zeta by using activity-based costing procedures would be: O a. $356,000. O b. $472,000. O c. None of the given answers. O d. $328,00. O e. $444,00.
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XYZ Co.currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers. Data on the cost pools and respective driver volumes follow. Product Pool No.1 (Driver: DLH) Pool No. 2 (Driver: SU) Pool No. 3 (Driver: PC) Fi Zeta 1,200 55 2,250 Beta 2,800 45 750 Pool Cost $160,000 $280,000 $360,000 The overhead cost allocated to Beta by using activity-based costing procedures would be: O a. $444,000. O b. $472,00. Oc. $328,000. O d. None of the given answers. O e. $356,000. NEXT PAGE OUS PAGE