I. Data concerning three of the activity cost The amount of activity for the yea
ID: 2515209 • Letter: I
Question
I. Data concerning three of the activity cost The amount of activity for the year is as follows: pools of Salcido LLC, a legal firm, have been provided below Processing costs are assigned to products using The activity rate for the "meeting with clients" activity cost pool is closest to 100 per meešng hour $78 per meeting hour $178 per meeing hour $1,358,674 per meeting hour What would be the total overhoad cost per delivery achine-hours (MHs) and Supervising costs are according to the activity based costing system? nassigned to products using the number of batches. other words, what would be the overall activity rate for the deliveries activity cost nearest whole cent.) The costs in the Other activity cost pool are not assigned to products. Activity data appear below pool? (Round to the $6.97 5.69 8.26 $7.40 2 Foster Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity based costing system: costing to compute product margins Overhead costs have already been allocatec Finally, sales and direct cost data are combined with to the company's three activity cost pools Processing, Supervising, and Other. The costs in those activity cost pools appear below: Processing and Supervising costs to determine product margins. Overhead costs Distribution of resource consumption: 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 appear below What is the overhead cost assigned to Product M5 under activity-based costing? $33,488 $22,264 $41,000 $17,376 The "Other activity cost pool consists of the costs of dle capacity and organization-sustaining costs The amount of activity for the year is as follows Finally, sales and direct cost data are combined wit Processing and Supervising costs to determineExplanation / Answer
Q1.
The Activity Rate for the activity "Meeting with Clients" can be determined by dividing the actual costs incurred for this activity by the total activity hours booked.
Therefore, the Activity Rate for " Meeting with Clients" = Total cost incurred for "Meeting with Clients" / "Total Activity hours booked for "Meeting with Clients"
=> $ 13,58,674/ 7,680 hours ( Note: the image is blurred, so the numbers represent my best guess !!)
=> The activity rate for "Meeting with Clients" is $ 176.91 per hour
Answer : The given option $ 178 per hour is the closest to the answer.
Q2. The Total Overhead costs per Delivery according to the Activity Based Costing System can be computed as follows:
(Total Overhead Wages & Salaries * Resource Consumption distribution - Delivery % for Wages & Salaries + Total Ovehead - Other expenses * Delivery % for Other expenses) / Total Delivery Activity for the year.
Please note that the image is extremely blurred. Therefore, the numbers below represents my best guess !!
=> (104,300*39%?? + 70,300*50%) / 13300?? deliveries = $ 5.70
The closest answer is $ 5.69 (based on lack of image clarity !!)
Q 3) Answer : $ 17,376
Workings:
Step 1 : Total cost alocation based on cost driver
Processing cost allocation to Product = (Total cost of processing / Total Machine Hours) * Machine Hrs for product
For Product M5 = $ 5,520/ 11,500 Machine Hours * 575 hrs = $ 276
Similarly, Supervisory cost allocation to product = (Total supervisory cost / Total No. of batches)/ * No. of batches for product M5.
=> $ 34,200/ 1500 Batches * 750 Batches for product M5 = $17,100
Mirabel Corporation Overhead costs allocation Total Cost Cost Driver Total Activity Product M0 Product M5 Processing Cost 5520 Machine Hrs 11500 5,244 276 Supervising 34200 Batches 1500 17,100 17,100 Total costs allocated 22,344 17,376Processing cost allocation to Product = (Total cost of processing / Total Machine Hours) * Machine Hrs for product
For Product M5 = $ 5,520/ 11,500 Machine Hours * 575 hrs = $ 276
Similarly, Supervisory cost allocation to product = (Total supervisory cost / Total No. of batches)/ * No. of batches for product M5.
=> $ 34,200/ 1500 Batches * 750 Batches for product M5 = $17,100