Question

Radakovich Corporation has provided the following data from its activity-based costing system:

Activity Cost Pools	Total Cost			Total Activity
Assembly	$	1,210,110		57,000	machine-hours
Processing orders	$	68,161		2,370	orders
Inspection	$	153,450		1,980	inspection-hours

The company makes 760 units of product F60N a year, requiring a total of 1,610 machine-hours, 106 orders, and 36 inspection-hours per year. The product's direct materials cost is $59.86 per unit and its direct labor cost is $17.35 per unit. The product sells for $145.40 per unit.

According to the activity-based costing system, the product margin for product F60N is: (Round your intermediate calculations to 2 decimal places.)

$51,824.40

$11,805.54

$14,595.54

$14,854.10

Betterton Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs—equipment depreciation and supervisory expense-are allocated to three activity cost pools—Machining, Order Filling, and Other—based on resource consumption. Data to perform these allocations appear below:

Overhead costs:
Equipment depreciation	$	62,750
Supervisory expense	$	7,000

Distribution of Resource Consumption Across Activity Cost Pools:
	Activity Cost Pools
	Machining	Order Filling	Other
Equipment depreciation	0.50	0.30	0.20
Supervisory expense	0.10	0.40	0.50

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 data for the company's two products follow:

Activity:
	MHs (Machining)			Orders (Order Filling)
Product A8		3,900			1,400
Product K2		21,500			4,200
Total		25,400			5,600

How much overhead cost is allocated to the Machining activity cost pool under activity-based costing in the first stage of allocation?

$700

$12,025

$31,375

$32,075

Manton Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs—equipment expense and indirect labor—are allocated to the three activity cost pools—Processing, Supervising, and Other—based on resource consumption. Data to perform these allocations appear below:

Overhead costs:
Equipment expense	$	54,500
Indirect labor	$	9,900

Distribution of Resource Consumption Across Activity Cost Pools:
	Activity Cost Pools
	Processing			Supervising			Other
Equipment expense		0.60			0.20			0.20
Indirect labor		0.10			0.30			0.60

In the second stage, 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:
	MHs (Processing)				Batches (Supervising)
Product Z5		6,670				2,160
Product C8		16,330				1,440
Total		23,000				3,600

The activity rate for the Processing activity cost pool under activity-based costing is closest to:

Noree

$1.46 per MH

$1.42 per MH

$3.42 per MH

$.30 per MH

Answer 1

1)	Product margin for F60N
						Amount
	Selling price (760*145.40)					110504
	less:Expenses
	direct materials		(760*59.86)			45493.6
	Direct labor		(760*17.35)			13186
	overhead
	Assembly		(1210110/57000)*1610=			34180.3
	processing		(68161/2370)*106			3048.551
	inspection		(153450/1980)*36=			2790
	total expense					98698.45
	product margin					11805.54	answer
2)						Machining
	Equipment depreciation 62750*50%					31375
	Supervisory expense (7000*10%)					700
	First stage allocation					32075	answer
3)						processing
	Equipment expense		54500*60%=			32700
	Indirect labor		9900*10%			990
						33690
	Activity rate =		33690/23000
			1.464783
			1.46	per machine hours- answer