Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption. Deta to perform these allocations appear below: Overhead costs: Equipment depreciation Supervisory expense $ 35,000 $ 12,000 Distribution of Resource Consumption Across Activity Cost Pools: Equipment depreciation Supervisory expense Machining 0.40 0.40 Activity Cost Pools Order Filling 0.30 0.201 Other 8.30 0.40 In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity: Orders (Order MHs (Machining) Filling) Product W1 Product Me 5,660 109 22,100 932 Total 27,760 1,041 Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins. Sales and Direct Cost Data: Product W1 Product Me Sales (total) Direct materials (total) Direct labor (total) $ 64,150 $ 60,700 $ 33,400 $ 22,600 $ 17,200 $ 32,600 What is the product margin for Product W1 under activity-based costing? Note: Round your intermediate calculations to 2 decimal places.
Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption. Deta to perform these allocations appear below: Overhead costs: Equipment depreciation Supervisory expense $ 35,000 $ 12,000 Distribution of Resource Consumption Across Activity Cost Pools: Equipment depreciation Supervisory expense Machining 0.40 0.40 Activity Cost Pools Order Filling 0.30 0.201 Other 8.30 0.40 In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity: Orders (Order MHs (Machining) Filling) Product W1 Product Me 5,660 109 22,100 932 Total 27,760 1,041 Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins. Sales and Direct Cost Data: Product W1 Product Me Sales (total) Direct materials (total) Direct labor (total) $ 64,150 $ 60,700 $ 33,400 $ 22,600 $ 17,200 $ 32,600 What is the product margin for Product W1 under activity-based costing? Note: Round your intermediate calculations to 2 decimal places.
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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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment
depreciation and supervisory expense-to three activity cost pools-Machining, Order Filling, and Other-based on resource consumption. Deta to perform these allocations
appear below:
Overhead costs:
Equipment depreciation
Supervisory expense
$ 35,000
$ 12,000
Distribution of Resource Consumption Across Activity Cost Pools:
Equipment depreciation
Supervisory expense
Machining
0.40
0.40
Activity Cost Pools
Order Filling
0.30
0.201
Other
8.30
0.40
In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The
costs in the Other activity cost pool are not assigned to products.
Activity:
Orders (Order
MHs (Machining)
Filling)
Product W1
Product Me
5,660
109
22,100
932
Total
27,760
1,041
Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins.
Sales and Direct Cost Data:
Product W1
Product Me
Sales (total)
Direct materials (total)
Direct labor (total)
$ 64,150
$ 60,700
$ 33,400
$ 22,600
$ 17,200
$ 32,600
What is the product margin for Product W1 under activity-based costing?
Note: Round your intermediate calculations to 2 decimal places.
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