Question

5. Peter Company has the following pools, drivers and pool rates for its activity-based costing system: Pool Driver Rate Machining Machine Hours $60 per machine hour Ordering of Parts Number of Orders $180 per order Design Design Hours $600 per design hour Customer Customers $2,200 per customer Other n/a n/a Becca Company placed an order with Peter for 1,800 units of a custom product. The order required $90,000 worth of direct material and $36,000 worth of direct labor. The order also required 150 machine hours, 120 part orders and 50 design hours. Becca places several orders a year with Peter. a. What is the overhead cost assigned to the order using activity-based costing? b. What is the total cost of the order using activity-based costing? 6. Racing Company makes two types of bikes-mountain bike and racing bike. Data concerning these two product lines appear below: Mountain Racing Direct Material $500,000 $700,000 Direct Labor $200,000 $150,000 Product Delivery Charges $60,000 $80,000 Machine Hours Used 2,500 2,000 Designs Needed Part Orders 400 600 The rates for the activity pools are as follows: Pool Driver Rate Machining Pool Machine Hours $80 per machine hour Design Pool Number of Designs $1,200 per design Ordering Parts Pool Part Orders $300 per part order 100 Revenues from mountain bike were $2,600,000. What is the product margin for Mountain bike?

Answer 1

3160 5. a) Calculation 4 Ovexhead Cost Assigmed Machining (8 60 x 150 Machine how $9000 I order of Parts (8 180 x 120 part order) Desiano_(8600 50 design hous)___ 830.000 Customer ($2200x 200x 1 curame) 1 customer ) $ 2200 Overhead Cost Assigned $62800 116) Calculation of Toral cost sia dan Direct Materials and a $90,000 Direct Labor 8 36000 Overheads $ 62.800 O Toral Cost → GARD$880 8188800 Calculation of Product Margin jou mountain Bike Revenue RECOR $ 2600000 Less; Direct Material 28 noin (8 500000) Direct Labou (600X C 8 200,000) Overhead broduct Delivery charge of $60000 Machining cosť (880x2500)= $200,000 Desigming cost ($1200x 40 )= 48,000 Ordesing cost ($300x400)- 8120,000 ($ 428000) Product Margin + 0000 $1472000

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