Question

Greife Corporation's activity-based costing system has three activity cost pools-Machining, Setting Up, and Other. The company's overhead costs have already been allocated to these cost pools as follows: Machining Setting Up $56,754 $81,016 $18,900 Other 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. The following table shows the machine-hours and number of batches associated with each of the company's two products: Batches MHs Product KO 2,190 8,320 1,350 Product W9 290 10,510 1,640 Total Additional data concerning the company's products appears below: Product K0 Product W9 Sales (total) Direct materials (total) Direct labor (total) $263,000 82,100 92,500 $231,000 87,300 61,300 Required: a. Calculate activity rates for each activity cost pool using activity-based costing. b. Determine the amount of overhead cost that would be assigned to each product using activity-based costing. c. Determine the product margins for each product using activity-based costing. Complete this question by entering your answers in the tabs below. Required A Required B Required C Calculate activity rates for each activity cost pool using activity-based costing. (Round your answers to 2 decimal places.)

Answer 1

1 a) 2 ning Activity Rate 5.4 per MH 49.4 per batch 3 Machining 4 Setting up 5 6 b) Product KO 11,826 $ 66,690$ 78,516 $ Product W9 44,928 14,326 59,254 $ 8 Machining 9 Setting up 10 Total 11 12 c) 13 14 Sales (Total) 15 Direct materials 16 Direct labor 17 Overhead assigned 18 Product Margin $ $ $ $ Product KO 263,000 $ 82,100 $ 92,500 $ 78,516 $ 9,884 $ Product W9 231,000 87,300 61,300 59,254 23,146 Product KO Product W9 $ $ Product Margin 9,884 23,146

1 a) 2 3 Machining 4 Setting up =56754/10510 =81016/1640 Activity Rate per MH per batch 6 b) 8 Machining 9 Setting up 10 Total Product KO =2190*B3 =1350*B4 =+B8+B9 Product W9 =8320*B3 =290*B4 =+C8+C9 tting up 11 12 c) 13 Product KOT Product W9 14 Sales (Total) 263000 231000 15 Direct materials 82100 87300 16 Direct labor 92500 61300 17 Overhead assigned =+B10 =+C10 18 Product Margin =+B14-B15-B16-B17 =+C14-C15-C16-C17 19 Product Margin 21 Product KO =+B18 22 Product W9 =+C18