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115. What is the product margin for Product F2 under activity-based costing?
116. The activity rate for the Order Filling activity cost pool under activity-based costing is
closest to:
117. What is the overhead cost assigned to Product I6 under activity-based costing?
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118. Tresselt Corporation has provided the following data from its activity-based costing
accounting system:
Distribution of Resource Consumption across 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.
Required:
a. Determine the total amount of indirect factory wages and factory equipment depreciation costs
that would be allocated to the Product Processing activity cost pool. Show your work!
b. Determine the total amount of indirect factory wages and factory equipment depreciation costs
that would NOT be assigned to products. Show your work!
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119. Yoke Corporation has provided the following data from its activity-based costing
accounting system:
Distribution of Resource Consumption across 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.
Required:
a. Determine the total amount of supervisory wages and factory utilities costs that would be
allocated to the Unit Processing activity cost pool. Show your work!
b. Determine the total amount of supervisory wages and factory utilities costs that would NOT be
assigned to products. Show your work!
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120. The following data have been provided by Mesa Corporation from its activity-based
costing accounting system:
Distribution of Resource Consumption across 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.
Required:
a. Determine the total amount of supervisory wages and factory utilities costs that would be
allocated to the Machining activity cost pool. Show your work!
b. Determine the total amount of supervisory wages and factory utilities costs that would NOT be
assigned to products. Show your work!
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121. Cosgrove Company manufactures two products, Product K-7 and Product L-15. Product
L-15 is of fairly recent origin, having been developed as an attempt to enter a market closely
related to that of Product K-7. Product L-15 is the more complex of the two products, requiring
2.0 hours of direct labor time per unit to manufacture compared to 1.0 hour of direct labor time
for Product K-7. Product L-15 is produced on an automated production line.
Overhead currently is applied to the products on the basis of direct labor-hours. The company
estimated it would incur $510,000 in manufacturing overhead costs and produce 10,000 units of
Product L-15 and 40,000 units of Product K- 7 during the current year.
Unit costs for materials and labor are:
Required:
a. Compute the predetermined overhead rate under the current method, and determine the unit
product cost of each product for the current year.
b. The company is considering the use of activity-based costing as an alternative to its traditional
costing method for manufacturing overhead. Data relating to the company's activity cost pools for
the current year are given below:
Using the data above, determine the unit product cost of each product for the current year.
c. What items of overhead cost make Product L-15 so costly to produce according to the activity-
based costing system? What influence might the activity-based costing data have on
management's opinions regarding the profitability of Product L-15?
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122. Findt & Thompson PLC, a consulting firm, uses an activity-based costing in which there
are three activity cost pools. The company has provided the following data concerning its costs
and its activity based costing system:
Costs:
Distribution of resource consumption:
Required:
a. How much cost, in total, would be allocated to the Working On Engagements activity cost pool?
b. How much cost, in total, would be allocated to the Business Development activity cost pool?
c. How much cost, in total, would be allocated to the Other activity cost pool?
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123. Roskam Housecleaning provides housecleaning 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.
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining
costs.
One particular client, the Haan family, requested 49 jobs during the year that required a total of
245 hours of housecleaning. For this service, the client was charged $2,500.
Required:
a. Compute the activity rates (i.e., cost per unit of activity) for the activity cost pools. Round off
all calculations to the nearest whole cent.
b. Using the activity-based costing system, compute the customer margin for the Haan family.
Round off all calculations to the nearest whole cent.
c. Assume the company decides instead to use a traditional costing system in which ALL costs
are allocated to customers on the basis of cleaning hours. Compute the margin for the Haan
family. Round off all calculations to the nearest whole cent.
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124. The Spurling Cleaning Brigade Company provides housecleaning 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.
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining
costs.
One particular client, the Vandal family, requested 32 jobs during the year that required a total of
192 hours of housecleaning. For this service, the client was charged $2,200.
Required:
a. Using the activity-based costing system, compute the customer margin for the Vandal family.
Round off all calculations to the nearest whole cent.
b. Assume the company decides instead to use a traditional costing system in which ALL costs
are allocated to customers on the basis of cleaning hours. Compute the margin for the Vandal
family. Round off all calculations to the nearest whole cent.
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125. Daba Company manufactures two products, Product F and Product G. The company
expects to produce and sell 1,400 units of Product F and 1,800 units of Product G during the
current year. The company uses activity-based costing to compute unit product costs for external
reports. Data relating to the company's three activity cost pools are given below for the current
year:
Required:
Using the activity-based costing approach, determine the overhead cost per unit for each
product.
126. Bubb Corporation has provided the following data from its activity-based costing
accounting system:
Required:
Compute the activity rates for each of the three cost pools. Show your work!
127. Data concerning three of Pressnell Corporation's activity cost pools appear below:
Required:
Compute the activity rates for each of the three cost pools. Show your work!
128. Schmeider Corporation uses the following activity rates from its activity-based costing to
assign overhead costs to products.
Data concerning two products appear below:
Required:
How much overhead cost would be assigned to each of the two products using the company's
activity-based costing system?
