Question

1. Paul Company has two products: A and B. The company uses activity-based costing. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows: Activity Cost Pool Activity 1............ Activity 2 Activity 3. Estimated Cost $22,000 $16,240 $14,600 Expected Activity Product A Product B 400 100 380 200 500 250 Total 500 580 750 The activity rate under the activity-based costing system for Activity 3 is closest to: 2. James Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity cost pools: Actual Activity Estimated Overhead Cost $11,916 $12,360 $19,950 Activity 1 Activity 2............. Activity 3.............. Expected Activity 900 1,200 1,000 915 1,185 965 The amount of overhead applied for Activity 2 during the year was closest to: 3. Jolmi Corporation has provided the following data from its activity-based costing accounting system: Activity Cost Pools Designing products...... Setting up batches... Assembling products ... Total Cost $1,526,916 $15,580 $39,900 Total Activity 8,436 product design hours 380 batch set-ups 3,990 assembly hours The activity rate for the "designing products" activity cost pool is closest to:

Answer 1

Answers :

1) Activity Rate For Activity 3

Activity Rate = Estiamed Cost / Estiamted Total Activity

Acticity rate = 14,600 / 750 = 19.467 = 19.47 (Answer)

2) Overheads Applied for the Activity 2

Overhead Applied = ( Estimated overhead cost / EXpected Activity) * Actual Activity

= (12,360 /1,200) *1,185 = $10.30 *1185 = $ 12,205.50 (Answer)

3) Activity Rate for Designing Prodcut = Total cost / Total Activity

= 1,526,916 / 8,436 = $181 Per Design hour (Answer)