Deemer Corporation has an activity-based costing system with three activity cost pools-Processing. Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on reso consumption. Data used in the first stage allocations follow: Overhead costs: Equipment expense Indirect labor Distribution of Resource Consumption Across Activity Cost Pools: Equipment expense Indirect labor Product F6 Product Xe Total Multiple Choice Processing costs are assigned to products using machine-hours (MHS) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Activity: O $73,000 $ 6,900 MHS (Processing) 10,900 1,780 12,680 $919 per batch $4.60 per batch Processing 0.40 0.40 $34.00 per batch The activity rate for the Supervising activity cost pool under activity-based costing is closest to: $13.89 per batch Activity Cost Pools Supervising 0.40 0.50 Batches (Supervising) Other 0.20 0.10 920 1,430 2,350

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 12E: Activity cost pools, activity rates, and product costs using activity-based costing Caldwell Home...
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Deemer Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource
consumption. Data used in the first stage allocations follow:
Overhead costs:
Equipment expense
Indirect labor
Distribution of Resource Consumption Across Activity Cost Pools:
Equipment expense
Indirect labor
Activity:
Product F6
Product X0
Total
Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:
Multiple Choice
O
$73,000
$ 6,900
MHs
(Processing)
10,900
1,780
12,680
$9.19 per batch
$4.60 per batch
Processing
0.40
0.40
The activity rate for the Supervising activity cost pool under activity-based costing is closest to:
$34.00 per batch
$13.89 per batch
Activity Cost Pools
Supervising
0.40
0.50
Other
0.20
0.10
Batches
(Supervising)
920
1,430
2,350
Transcribed Image Text:Deemer Corporation has an activity-based costing system with three activity cost pools-Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment expense Indirect labor Distribution of Resource Consumption Across Activity Cost Pools: Equipment expense Indirect labor Activity: Product F6 Product X0 Total Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Multiple Choice O $73,000 $ 6,900 MHs (Processing) 10,900 1,780 12,680 $9.19 per batch $4.60 per batch Processing 0.40 0.40 The activity rate for the Supervising activity cost pool under activity-based costing is closest to: $34.00 per batch $13.89 per batch Activity Cost Pools Supervising 0.40 0.50 Other 0.20 0.10 Batches (Supervising) 920 1,430 2,350
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