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Asked by Savannah Pless on Jun 16, 2024

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Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and Other. The company's overhead costs, which consist of equipment depreciation and indirect labor, have been allocated to the cost pools already and are provided in the table below.
Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and Other. The company's overhead costs, which consist of equipment depreciation and indirect labor, have been allocated to the cost pools already and are provided in the table below. Costs in the Machining cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. Data concerning the two products and the company's costs appear below: Required: a. Calculate activity rates for each activity cost pool using activity-based costing.b. Determine the amount of overhead cost that would be assigned to each product using activity-based costing.c. Determine the product margins for each product using activity-based costing. Costs in the Machining cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. Data concerning the two products and the company's costs appear below:
Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and Other. The company's overhead costs, which consist of equipment depreciation and indirect labor, have been allocated to the cost pools already and are provided in the table below. Costs in the Machining cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. Data concerning the two products and the company's costs appear below: Required: a. Calculate activity rates for each activity cost pool using activity-based costing.b. Determine the amount of overhead cost that would be assigned to each product using activity-based costing.c. Determine the product margins for each product using activity-based costing. Required:
a. Calculate activity rates for each activity cost pool using activity-based costing.b. Determine the amount of overhead cost that would be assigned to each product using activity-based costing.c. Determine the product margins for each product using activity-based costing.

Activity Rates

These are the costs assigned to work based on the activities required to complete a job or task.

Batches

Groups of items or goods processed or produced together within a specified time frame in manufacturing or production.

Product Margins

The difference between the selling price of a product and the cost of goods sold, representing the profit made on each product.

  • Absorb the core principles of Activity-Based Costing (ABC).
  • Evaluate the activity rates pertinent to different cost pools within an ABC system.
  • Allocate indirect financial charges to products via computed activity rates.
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Perla EspinosaJun 20, 2024
Final Answer :
a.Computation of activity rates:
a.Computation of activity rates: b.Assign overhead costs to products:Overhead cost for Product Z3: Overhead cost for Product T1: c.Determine product margins: b.Assign overhead costs to products:Overhead cost for Product Z3:
a.Computation of activity rates: b.Assign overhead costs to products:Overhead cost for Product Z3: Overhead cost for Product T1: c.Determine product margins: Overhead cost for Product T1:
a.Computation of activity rates: b.Assign overhead costs to products:Overhead cost for Product Z3: Overhead cost for Product T1: c.Determine product margins: c.Determine product margins:
a.Computation of activity rates: b.Assign overhead costs to products:Overhead cost for Product Z3: Overhead cost for Product T1: c.Determine product margins:

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