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Wecker Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:
Activities
Activity Rate
Setting up batches
$85.25
per batch
Processing customer orders
$76.21
per customer order
Assembling products
$11.31
per assembly hour
Data concerning two products appear below:
Product V09X
Product A09X
Number of batches
71
14
Number of customer orders
22
11
Number of assembly hours
494
699
How much overhead cost would be assigned to Product V09X using the activity-based costing system?
$172.77
$146,481.61
$13,316.51
$6,052.75
2.
The controller of Ferrence Company estimates the amount of materials handling overhead cost that should be allocated to the company's two products using the data that are given below:
Wall Mirrors
Specialty Windows
Total expected units produced
7,900
2,800
Total expected material moves
790
990
Direct labor-hours per unit
6
5
The total materials handling cost for the year is expected to be $18,964.40.
If the materials handling cost is allocated on the basis of direct labor-hours, how much of the total materials handling cost should be allocated to the wall mirrors? (Round your intermediate calculation to four decimal places. Round your final answer to nearest whole dollar.)
$47,400
$14,642
$10,317
$9,482
3.
Addy Company has two products: A and B. The annual production and sales of Product A is 2,450 units and of Product B is 1,850 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labor-hours per unit and Product B requires 0.6 direct labor-hours per unit. The total estimated overhead for next period is $107,100. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools--Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows:
Activities
Estimated Overhead cost
Expected Activity
Product A
Product B
Total
Activity 1
$33,094
1,750
1,350
3,100
Activity 2
18,850
2,450
950
3,400
General Factory
55,156
735
1,110
1,845
Total
$107,100
(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.) The predetermined overhead rate under the traditional costing system is closest to: rev: 11_16_2012
$5.54
$29.89
$58.05
$10.68
4.
Accola Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 1,800 units and of Product B is 1,050 units. There are three activity cost pools, with estimated costs and expected activity as follows:
Activities
Estimated Overhead Cost
Expected Activity
Product A
Product B
Total
Activity 1
$46,775
1,300
1,200
2,500
Activity 2
$68,277
2,300
1,000
3,300
Activity 3
$82,502
720
700
1,420
The overhead cost per unit of Product A is closest to:
$63.19
$69.32
$79.82
$46.56
5.
Aujla Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:
Activities (and Activity Measures)
Estimated Overhead Cost
Machine related (machine-hours)
$292,640
Batch setup (setups)
$315,900
General factory (direct labour-hours)
$220,320
Expected Activity
Activities
Product X
Product Y
Total
Machine related
4,900
6,900
11,800
Batch setup
9,800
1,900
11,700
General factory
3,900
6,900
10,800
Assuming that actual activity turns out to be the same as expected activity, the total amount of overhead cost allocated to Product X would be closest to:
$315,900
$704,120
$388,220
$465,680
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