Q4. Camilla, Inc. uses activity-based costing to cost its two products: Standard and Deluxe. The company has provided the following data relating to its activities: Cost Pools Machine (machine-hours) Cutting (number of cuts) Sales (number of orders) Estimated Cost $144,000 $536,000 $108,000 Solution: Machine hours Number of cuts Number of orders Estimated Activity Deluxe 7,000 5,000 2,000 Standard 1,000 3,000 7,000 Required: c. What is the activity rate for the cutting cost pool? d. If actual activity is the same as that estimated, what is the total amount of overhead cost allocated to the standard product?
Q4. Camilla, Inc. uses activity-based costing to cost its two products: Standard and Deluxe. The company has provided the following data relating to its activities: Cost Pools Machine (machine-hours) Cutting (number of cuts) Sales (number of orders) Estimated Cost $144,000 $536,000 $108,000 Solution: Machine hours Number of cuts Number of orders Estimated Activity Deluxe 7,000 5,000 2,000 Standard 1,000 3,000 7,000 Required: c. What is the activity rate for the cutting cost pool? d. If actual activity is the same as that estimated, what is the total amount of overhead cost allocated to the standard product?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Q4. Camilla, Inc. uses activity-based costing to cost its two products: Standard and Deluxe. The company
has provided the following data relating to its activities:
Cost Pools
Machine (machine-hours)
Cutting (number of cuts)
Sales (number of orders)
Estimated Cost
$144,000
$536,000
$108,000
Solution:
Machine hours
Number of cuts
Number of orders
Estimated Activity
Deluxe
7,000
5,000
2,000
Standard
1,000
3,000
7,000
Required:
c. What is the activity rate for the cutting cost pool?
d.
If actual activity is the same as that estimated, what is the total amount of overhead cost
allocated to the standard product?
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