Asked by Emily Talbot on May 19, 2024
Verified
Desilets Corporation has provided the following data from its activity-based costing accounting system:
Distribution of Resource Consumption across Activity Cost Pools:
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.Required:a. Determine the total amount of supervisory wages and factory utilities costs that would be allocated to the Unit Processing activity cost pool.b. Determine the total amount of supervisory wages and factory utilities costs that would NOT be assigned to products.
Resource Consumption
The act of using resources, such as materials, time, and energy, in the process of producing goods and services.
Idle Capacity
The portion of a company's resources or production capacity that is not being used in production but still incurs costs.
Activity-Based Costing
A costing methodology that assigns overhead and indirect costs to related products and services based on the activities they require.
- Accurately attribute indirect costs to products by applying the principles of activity-based costing.
- Recognize the variance in assigning financial charges to merchandise as opposed to neglecting this assignment.
Verified Answer
b. As stated in the problem, the costs allocated to the "Other" cost pool are not assigned to products.
Learning Objectives
- Accurately attribute indirect costs to products by applying the principles of activity-based costing.
- Recognize the variance in assigning financial charges to merchandise as opposed to neglecting this assignment.
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