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. Pool No.1 (Drlver: DLH) Product Pool No. 2 (Driver: SU) Pool No. 3 (Driver: PC) Beta 1,200 45 2,250 Zeta 2,800 55 750 Pool Cost $160,000 $280,000 $360,000 The overhead cost allocated to Zeta by using activity-based costing procedures would be: O a. $444,000. O b. None of the given answers. c. $472,000. Od. $356,000. e. $328,000.

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. Pool No.1 (Drlver: DLH) Product Pool No. 2 (Driver: SU) Pool No. 3 (Driver: PC) Beta 1,200 45 2,250 Zeta 2,800 55 750 Pool Cost $160,000 $280,000 $360,000 The overhead cost allocated to Zeta by using activity-based costing procedures would be: O a. $444,000. O b. None of the given answers. c. $472,000. Od. $356,000. e. $328,000.

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Description: XYZ Co. currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta onthe basis of direct labor hours. The company is considering a shift to activity-based costing and the creation ofindividual cost pools t

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...

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Concept explainers

Process Costing

Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure. 

Job Costing

Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.

ABC Costing

Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.

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Question

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)
Beta
1,200
45
2,250
Zeta
2,800
55
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.
$444,000.
Ob. None of the given answers.
O c. $472,000.
Od. $356,000.
O e.
$328.000.

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