Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining Order Filling, and Other-based on resource consumption. Data to perform these allocations appear below: Overhead costs: Equipment depreciation. Supervisory expense $ 30,000 $ 14,800 Distribution of Resource Consumption Across Activity Cost Pools: Equipment depreciation Supervisory expense Product Wi Product Me Total Product W1 Product Me Total Activity Cost Pools Machining Order Filling 0.50 0.50 In the second stage, Machining costs are assigned to products using machine-hours (Mits) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity: MHS (Machining) 5,530 17,000 22,530 0.40 0.30 Show Transcribed Text Orders (Order Filling) 161 964 1,125 Sales (total) Direct materials (total) Direct labor (total) G Orders (Order MHs (Machining) Filling) 5,530 161 17,000 964 22,530 1,125 Other 0.10 0.20 V Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins. Sales and Direct Cost Data: Product W1 Product Me $ 69,700 $ 65,700 $ 31,100 $ 23,900 $ 22,400 $ 29,500 What is the product margin for Product W1 under activity-based costing? (Round your intermediate calculations to 2 decimal places.)
Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining Order Filling, and Other-based on resource consumption. Data to perform these allocations appear below: Overhead costs: Equipment depreciation. Supervisory expense $ 30,000 $ 14,800 Distribution of Resource Consumption Across Activity Cost Pools: Equipment depreciation Supervisory expense Product Wi Product Me Total Product W1 Product Me Total Activity Cost Pools Machining Order Filling 0.50 0.50 In the second stage, Machining costs are assigned to products using machine-hours (Mits) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity: MHS (Machining) 5,530 17,000 22,530 0.40 0.30 Show Transcribed Text Orders (Order Filling) 161 964 1,125 Sales (total) Direct materials (total) Direct labor (total) G Orders (Order MHs (Machining) Filling) 5,530 161 17,000 964 22,530 1,125 Other 0.10 0.20 V Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins. Sales and Direct Cost Data: Product W1 Product Me $ 69,700 $ 65,700 $ 31,100 $ 23,900 $ 22,400 $ 29,500 What is the product margin for Product W1 under activity-based costing? (Round your intermediate calculations to 2 decimal places.)
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 12E: Activity cost pools, activity rates, and product costs using activity-based costing Caldwell Home...
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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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Transcribed Image Text:Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead
accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining. Order Filing, and Other-based on resource
consumption, Data to perform these allocations appear below:
Overhead costs:
Equipment depreciation
Supervisory expense
$ 30,000
$ 14,800
Distribution of Resource Consumption Across Activity Cost Pools:
Equipment depreciation
Supervisory expense
Activity:
Product W1
Product Me
Total
Machining Order Filling
0.50
0.50
In the second stage, Machining costs are assigned to products using machine-hours (Ms) and Order Filing costs are assigned to products using the
number of orders. The costs in the Other activity cost pool are not assigned to products.
Product W1
Product Me
Total
Activity Cost Pools
MHS (Machining)
5,530
17,000
22,530
0.40
0.30
Show Transcribed Text
5,530
17,000
22,530
Orders (Order
Filling)
161
964
1,125
Orders (Order
MHS (Machining) Filling)
161
964
1,125
Other
0.10
0.20
Ĉ
Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.
Sales and Direct Cost Data:
Product W1 Product Me
$ 69,700
$ 31,100
$ 22,400
Sales (total)
Direct materials (total)
Direct labor (total)
What is the product margin for Product W1 under activity-based costing? (Round your intermediate calculations to 2 decimal places.)
$ 65,700
$ 23,900
$ 29,500
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