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 S8 Product F1 Total $ 33,100 $ 11,700 Sales (total) Direct materials (total) Direct labor (total) Processing 0.30 0.30 MHS 3,000 7,100 10,100 Setting Up 0.30 0.10 Batches 1,000 500 1,500 Product S8 $ 65,800 $ 21,700 $ 27,300 Other 0.40 0.60 Product F1 $ 98,600 $ 34,700 $ 41,200 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) Distribution of Resource Consumption Across Activity Cost Pools Factory utilities Indirect labor Product S8 Product F1 Total $ 33,100 $ 11,700 Sales (total) Direct materials (total) Direct labor (total) Processing 0.30 0.30 MHS 3,000 7,100 10,100 Setting Up 0.30 0.10 Batches 1,000 500 1,500 Product S8 $ 65,800 $ 21,700 $ 27,300 Other 0.40 0.60 Product F1 $ 98,600 $ 34,700 $ 41,200 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:Required A Required B Required C Required D
Calculate activity rates for each activity cost pool using activity-based costing. (Round your answers to 2 decimal places.)
Activity Cost Pools
Activity Rate
Processing
Setting up
Required A Required B
Product S8
Product F1
Determine the amount of overhead cost that would be assigned to each product using activity-based costing. (Round
intermediate calculations to 2 decimal places.)
Amount of
Overhead Cost
per MH
per batch
Required C Required D
Product S8
Product F1
Required A Required B Required C
Determine the product margins for each product using activity-based costing. (Round intermediate calculations to 2 decimal
places.)
Product Margin
Required D
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)
Distribution of Resource Consumption Across Activity Cost Pools
Setting Up
0.30
0.10
Factory utilities
Indirect labor
Product S8
Product Fl
Total
Sales (total)
Direct materials (total)
Direct labor (total)
$ 33,100
$ 11,700
Processing
0.30
0.30
MHS
3,000
7,100
10,100
Batches
1,000
500
1,500
Product S8
$ 65,800
$ 21,700
$ 27,300
Other
0.40
0.60
Product Fl
$ 98,600
$ 34,700
$ 41,200
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.
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