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) $37,500 $15,600 Distribution of Resource Consumption Across Activity Cost Pools Processing Setting Up Other Factory utilities Indirect labor 0.30 0.30 0.40 0.30 0.10 0.60 MHs Batches Product S8 3,100 7,600 1,500 1,100 Product F1 Total 10,700 2,600 Product S8 Product F1 $ 96,400 $ 35,600 $ 38,800 Sales (total) Direct materials (total) $75,700 $26,000 Direct labor (total) $33,700 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.
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) $37,500 $15,600 Distribution of Resource Consumption Across Activity Cost Pools Processing Setting Up Other Factory utilities Indirect labor 0.30 0.30 0.40 0.30 0.10 0.60 MHs Batches Product S8 3,100 7,600 1,500 1,100 Product F1 Total 10,700 2,600 Product S8 Product F1 $ 96,400 $ 35,600 $ 38,800 Sales (total) Direct materials (total) $75,700 $26,000 Direct labor (total) $33,700 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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)
$37,500
$15,600
Distribution of Resource Consumption Across Activity Cost Pools
Processing
Setting Up
Other
Factory utilities
0.30
0.30
0.40
Indirect labor
0.30
0.10
0.60
MHs
Batches
Product S8
3,100
1,500
Product F1
7,600
1,100
Total
10,700
2,600
Product S8
Product F1
Sales (total)
Direct materials (total)
Direct labor (total)
$75,700
$26,000
$ 96,400
$ 35,600
$ 38,800
$33,700
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.
Complete this question by entering your answers in the tabs below.
Transcribed Image Text:Direct labor (total)
$33,700
$ 38,800
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.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Required C
Required D
Assign overhead costs to activity cost pools using activity-based costing.
Activity Cost Pools
Processing
Setting Up
Other
Total
Factory utilities
Indirect labor
Total
< Required A
Required B >
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