Mirabile Corporation uses activity-based costing to compute product margins. Ove
ID: 2544984 • Letter: M
Question
Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools--Processing, Supervising, and Other. The costs in those activity cost pools appear below:
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:
Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.
What is the product margin for Product M5 under activity-based costing?
.
Leaper Corporation uses an activity-based costing system with the following three activity cost pools:
The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs.
The company has provided the following data concerning its costs:
The distribution of resource consumption across activity cost pools is given below:
The activity rate for the Order Processing activity cost pool is closest to:
Processing $ 7,020 Supervising $ 41,040 Other $ 12,400Explanation / Answer
1 Product M5 Sales 88700 Less: Direct materials 30500 Direct labor 29800 Overhead: Processing 351 =7020/13500*675 Supervising 20520 =41040/1900*950 81171 Product Margin 7529 2 Order Processing Wages and salaries 120000 =400000*30% Depreciation 64000 =160000*40% Occupancy 45000 =180000*25% Total 229000 Activity rate for the Order Processing activity=229000/200= $1145