ASSIGNMENT 4
Q1. Hasty Hardwood Floors installs oak and other hardwood floors in homes and businesses. The
company uses an activity-based costing system for its overhead costs. The company has provided the
following data concerning its annual overhead costs and its activity-based costing system:
Distribution of Resource Consumption:
The “Other” activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The
amount of activity for the year is as follows:
A “square” is a measure of area that is roughly equivalent to 1,000 square metres.
Required:
a) Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the table
below:
b) Compute the activity rates (i.e., cost per unit of activity) for the Installing Floors and Job Support
activity cost pools by filling in the table below:
c) Compute the overhead cost, according to the activity-based costing system, of a job that involves
installing 3.4 squares.
Q2. Ingersol Draperies makes custom draperies for homes and businesses. The company uses an
activity-based costing system for its overhead costs. The company has provided the following data
concerning its annual overhead costs and its activity cost pools:
Distribution of Resource Consumption:
The “Other” activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The
amount of activity for the year is as follows:
Required:
a) Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the table
below:
b) Compute the activity rates (i.e., cost per unit of activity) for the Making Drapes and Job Support
activity cost pools by filling in the table below:
Q3. Hasty Hardwood Floors installs oak and other hardwood floors in homes and businesses. The
company uses an activity-based costing system for its overhead costs. The company has provided the
following data concerning its annual overhead costs and its activity-based costing system:
Distribution of Resource Consumption:
The “Other” activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The
amount of activity for the year is as follows:
A “square” is a measure of area that is roughly equivalent to 1,000 square metres.
Required:
a) Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the table
below:
Q4. Phoenix Company makes custom covers for air conditioning units for homes and businesses. The
company uses an activity-based costing system for its overhead costs. The company has provided the
following data concerning its annual overhead costs and its activity cost pools:
Distribution of Resource Consumption:
The “Other” activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The
amount of activity for the year is as follows:
Required:
a) Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the table
