Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense andindirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:Overhead costs:$ 59,000$ 12,700Equipment expenseIndirect laborDistribution of Resource Consumption Across Activity Cost Pools:Activity Cost PoolsProcessingSupervisingOtherEquipment expense0.300.500.20Indirect labor0.300.500.20Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned toproducts. Activity data for the company's two products follow:Activity:MHsBatches(Processing)(Supervising)Product F617, 2001,190Product Xo1,6201,330Total18,8202,520The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

Solution Working note Total overhead cost = Equipment expenses + indirect labor . = 59000+ 12700…

Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment expense Indirect labor $ 59,000 $ 12,700 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Processing Supervising 0.50 Other Equipment expense 0.30 0.20 Indirect labor 0.30 0.50 0. 20 Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Activity: MHs Batches (Processing) (Supervising) 1,190 1,330 Product F6 17, 200 1,620 18,820 Product Xe Total 2,520 The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment expense Indirect labor $ 59,000 $ 12,700 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Processing Supervising 0.50 Other Equipment expense 0.30 0.20 Indirect labor 0.30 0.50 0. 20 Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Activity: MHs Batches (Processing) (Supervising) 1,190 1,330 Product F6 17, 200 1,620 18,820 Product Xe Total 2,520 The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 3PB: Activity-based department rate product costing and product cost distortions Big Sound Inc....

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