Question

question 3 and 4

3. Data concerning three of the activity cost pools of Coutes LLC, a legal firm, have been provided below Activity Cost Pools Researching legal issues. Meeting with clients ........ Preparing documents ...... Total Cost S29,920 $665,500 $116,820 Total Activity 680 research hours 5,324 meeting hours 6,490 documents The activity rate for the "meeting with clients' activity cost pool is: Answer: $125 per meeting hour 110 points) 4.665.00 $125 5324 4. Westin 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: Estimated Expected Actual Overhead Cost Activity Activity Activity 1............... S11,916 900 915 Activity 2 S12,360 1,200 1,185 $19.950 Activity 3.. 965 1.000 The amount of overhead applied for Activity 2 during the year was Answer: [10 points)

Answer 1

1) Overhead rate

	Estimated overhead	estimated activity	activity rate
Meeting with clients	665500	5324	665500/5324 = 125 per meeting hour

2) Overhead rate for activity 2 = 12360/1200 = 10.30

Overhead applied to activity 2 = 1185*10.3 = 12205.50 or 12206