Martin Manufacturing has provided the following data from its activity-based costing system: Resource Costs Amount Factory supervision $420,000 Maintenance costs $280,000 Distribution of Resource Consumption across Activity Cost Pools: Activity Cost Pools Production Setup Material Handling Organizational Sustaining Total Factory supervision 40% Maintenance costs 55% 30% 35% 30% 10% 100% 100% The "Organizational Sustaining" activity cost pool consists of the costs that support the organization as a whole and are not assigned to specific products. How much factory supervision and maintenance costs would not be assigned to products using the activity-based costing system? Activity-Based Costing: Activity-Based Costing is a costing method that identifies activities in an organization and assigns the cost of each activity to products according to their actual consumption. This method recognizes the relationship between costs, activities and products, and assigns costs to products based on the resources they consume.

Martin Manufacturing has provided the following data from its activity-based costing system: Resource Costs Amount Factory supervision $420,000 Maintenance costs $280,000 Distribution of Resource Consumption across Activity Cost Pools: Activity Cost Pools Production Setup Material Handling Organizational Sustaining Total Factory supervision 40% Maintenance costs 55% 30% 35% 30% 10% 100% 100% The "Organizational Sustaining" activity cost pool consists of the costs that support the organization as a whole and are not assigned to specific products. How much factory supervision and maintenance costs would not be assigned to products using the activity-based costing system? Activity-Based Costing: Activity-Based Costing is a costing method that identifies activities in an organization and assigns the cost of each activity to products according to their actual consumption. This method recognizes the relationship between costs, activities and products, and assigns costs to products based on the resources they consume.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter11: Strategic Cost Management

Section: Chapter Questions

Problem 8E: Classify the following cost drivers as structural, executional, or operational. a. Number of plants...

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Mirabile 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 $ 3,800 $ 23,800 $ 10,400 Supervising other 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: Batches MHs (Processing) (Supervising) Product MO 9,700 500 Product M5 300 500 Total 10,000 1,000 Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. Product MO Product M5 $ 74,100 $ 28,500 $ 27,800 $ 89,900 $ 31,400 $ 41,700 Sales (total) Direct materials (total) Direct labor (total) What is the product margin for Product M5 under activity-based costing? Multiple Choice C4786
Miljohn Freelancing provides different services to its clients. The company uses an activity-based costing system for its overhead costs. The company has provided the following data from its activity-based costing system. Activity Cost Pool Total Cost Total Activity Consulting 368,364 36,250 hours Bookkeeping 142,500 8,100 jobs Client support 37,620 680 clients Other 220,000 Not Applicable The “Other” activity cost pool consists of the costs of idle capacity and organization-sustaining costs. One particular client, Adams Corporation requested 24 jobs during the year that required a total of 31 hours of service. For this service, the client was charged P1,750. Compute the increase/(decrease) in margin assuming Miljohn Freelancing decides to use traditional costing system in which all costs are allocated to…
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