Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
6-41
49. How much supervisory wages and factory supplies cost would NOT be assigned to
products using the activity-based costing system?
The following data have been provided by Kelch Corporation from its activity-based
costing accounting system:
Distribution of Resource Consumption across Activity Cost Pools:
Activity Cost Pools
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining
costs that are not assigned to products.
50. How much factory supervision and indirect factory labor cost would be assigned to the
Batch Set-Up activity cost pool?
51. How much factory supervision and indirect factory labor cost would NOT be assigned to
products using the activity-based costing system?
6-43
Fogle Florist specializes in large floral bouquets for hotels and other commercial spaces.
The company has provided the following data concerning its annual overhead costs and its
activity based costing system:
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:
52. What would be the total overhead cost per bouquet according to the activity based
costing system? In other words, what would be the overall activity rate for the making bouquets
activity cost pool? (Round to the nearest whole cent.)
53. What would be the total overhead cost per delivery according to the activity based
costing system? In other words, what would be the overall activity rate for the deliveries activity
cost pool? (Round to the nearest whole cent.)
Dillner Company uses an activity-based costing system with three activity cost pools. The
company has provided the following data concerning its costs and its activity based costing
system:
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining
costs.
You have been asked to complete the first-stage allocation of costs to the activity cost pools.
54. How much cost, in total, would be allocated in the first-stage allocation to the Order Size
activity cost pool?
55. How much cost, in total, would be allocated in the first-stage allocation to the Customer
Support activity cost pool?
6-48
56. How much cost, in total, should NOT be allocated to orders and products in the second
stage of the allocation process if the activity-based costing system is used for internal decision-
making?
The controller of Ferrence Company estimates the amount of materials handling overhead
cost that should be allocated to the company's two products using the data that are given below:
The total materials handling cost for the year is expected to be $16,486.40.
57. If the materials handling cost is allocated on the basis of direct labor-hours, how much of
the total materials handling cost would be allocated to the wall mirrors? (Round off your answer
to the nearest whole dollar.)
6-50
58. If the materials handling cost is allocated on the basis of material moves, how much of
the total materials handling cost would be allocated to the specialty windows? (Round off your
answer to the nearest whole dollar.)
Andujo Company allocates materials handling cost to the company's two products using
the below data:
The total materials handling cost for the year is expected to be $115,776.
59. If the materials handling cost is allocated on the basis of direct labor-hours, how much of
the total materials handling cost would be allocated to the prefab barns? (Round off your answer
to the nearest whole dollar.)
6-52
60. If the materials handling cost is allocated on the basis of material moves, how much of
the total materials handling cost would be allocated to the modular homes? (Round off your
answer to the nearest whole dollar.)
Abraham Company uses activity-based costing. The company has two products: A and B.
The annual production and sales of Product A is 200 units and of Product B is 1,000 units. There
are three activity cost pools, with total costs and activity as follows:
61. The activity rate for Activity 2 is closest to:
62. The cost per unit of Product B is closest to:
Austad Corporation uses activity-based costing to determine product costs for external
financial reports. The company has provided the following data concerning its activity-based
costing system:
63. The activity rate for the batch setup activity cost pool is closest to:
64. The total amount of overhead cost allocated to Product X would be closest to:
6-57
Kozloff Wedding Fantasy Company makes very elaborate wedding cakes to order. The
owner of the company has provided the following data concerning the activity rates in its activity-
based costing system:
The measure of activity for the size-related activity cost pool is the number of planned guests at
the wedding reception. The greater the number of guests, the larger the cake. The measure of
complexity is the number of tiers in the cake. The activity measure for the order-related cost pool
is the number of orders. (Each wedding involves one order.) The activity rates include the costs
of raw ingredients such as flour, sugar, eggs, and shortening. The activity rates do not include the
costs of purchased decorations such as miniature statues and wedding bells, which are
accounted for separately.
Data concerning two recent orders appear below:
65. Assuming that all of the costs listed above are avoidable costs in the event that an order
is turned down, what amount would the company have to charge for the Winterhalter wedding
cake to just break even?
66. Assuming that the company charges $613.98 for the Manliguis wedding cake, what would
be the overall margin on the order?
67. Suppose that the company decides that the present activity-based costing system is too
complex and that all costs (except for the costs of purchased decorations) should be allocated on
the basis of the number of guests. In that event, what would you expect to happen to the costs of
cakes?
