Question

Musich Corporation has an activity-based costing system with three acovity cost pools--Machining, Seto ng Up, and other. The company's overhead costs, which consist of equipment depreciation and indirect labor, have been allocated to the cost pools already and are provided in the table below. Equipment depreciation Indirect labor Activity Cost Pools Machining Setting Up Other Total $ 9400 $ 48,700$ 23,800 $ 21,900 4500 2900 4100 11,500 $ 3.900 51.600 $ 27,900 $ 93.400 Total Costs in the Machining cost pool are assigned to products based on machine hours (MHS) and costs in the Setting up cost pool are assigned to products based on the number of batches. Costs in the other cost pool are not assigned to products. Data concerning the two products and the company's costs appear below. MHS Product 23 Batches 750 1350 2100 6000 6200 12.200 Product T1 Total Product T1 Sales (total) Product Z3 $ 230,800 $ 255,500 $ $4,000$ 97,600 $ 110,000 $ 105,200 Direct materials (total) Direct labor (total)

Answer 1

Activity Rate = Overhead costs/Total Activity
Machining	1.139344262
Setting up	24.57142857
Applied = Activity Rate*Activity Consumed
Product Z3 = 1.14*6000+24.57*750
25267.5
T1
40237.5
Product Margin = Sales - direct material - direct labor - overheads
Z3	11532.50
T1	12462.50

A 1 Activity Rate Overhead costs/Total Activity 2 Machining 3 Setting up = 13900/12200 =51600/2100 4 5 Applied Activity Rate Activity Consumed 6 Product Z3 = 1.14*6000+24.57*750 71.14*6000+24.57*750 9 T1 101.14*6200+24.57*1350 11 12 Product Margin Sales direct material - direct labor - overheads 230800-84000-110000-A7 13 Z3 14 T1 255500-97600-105200-A10 15