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Asked by Tyler Decker on May 16, 2024

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Groleau Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other. The company's overhead costs, which consist of factory utilities and indirect labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Costs in the Processing 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 and activity-based costing system appear below:
Groleau Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other. The company's overhead costs, which consist of factory utilities and indirect labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Costs in the Processing 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 and activity-based costing system appear below: Distribution of Resource Consumption Across Activity Cost Pools Required:a. Assign overhead costs to activity cost pools using activity-based costing.b. Calculate activity rates for each activity cost pool using activity-based costing.c. Determine the amount of overhead cost that would be assigned to each product using activity-based costing.d. Determine the product margins for each product using activity-based costing. Distribution of Resource Consumption Across Activity Cost Pools
Groleau Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other. The company's overhead costs, which consist of factory utilities and indirect labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Costs in the Processing 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 and activity-based costing system appear below: Distribution of Resource Consumption Across Activity Cost Pools Required:a. Assign overhead costs to activity cost pools using activity-based costing.b. Calculate activity rates for each activity cost pool using activity-based costing.c. Determine the amount of overhead cost that would be assigned to each product using activity-based costing.d. Determine the product margins for each product using activity-based costing. Required:a. Assign overhead costs to activity cost pools using activity-based costing.b. Calculate activity rates for each activity cost pool using activity-based costing.c. Determine the amount of overhead cost that would be assigned to each product using activity-based costing.d. Determine the product margins for each product using activity-based costing.

Activity Cost Pools

Aggregations of all the costs associated with a particular business activity or process, used in activity-based costing.

Machine-Hours

A measure of the amount of time a machine is operated, used in allocating manufacturing costs to products.

Batches

Groups or sets of goods that are processed or produced together within a production cycle or process.

  • Cultivate an understanding of the Activity-Based Costing (ABC) principles.
  • Quantify the rates associated with activities among different cost pools in an ABC setting.
  • Allocate financial overheads to products via determined activity rates.
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Sajan PanchalMay 16, 2024
Final Answer :
a.Assign overhead costs to activity cost pools by applying the percentages in the Distribution of Resource Consumption Across Activity Cost Pools table to the respective costs. For example, the first entry in the table is computed as follows: 0.30 × $24,000 = $7,200.
a.Assign overhead costs to activity cost pools by applying the percentages in the Distribution of Resource Consumption Across Activity Cost Pools table to the respective costs. For example, the first entry in the table is computed as follows: 0.30 × $24,000 = $7,200. b.Computation of activity rates: c.Assign overhead costs to products:Overhead cost for Product S8: Overhead cost for Product F1: d.Determine product margins: b.Computation of activity rates:
a.Assign overhead costs to activity cost pools by applying the percentages in the Distribution of Resource Consumption Across Activity Cost Pools table to the respective costs. For example, the first entry in the table is computed as follows: 0.30 × $24,000 = $7,200. b.Computation of activity rates: c.Assign overhead costs to products:Overhead cost for Product S8: Overhead cost for Product F1: d.Determine product margins: c.Assign overhead costs to products:Overhead cost for Product S8:
a.Assign overhead costs to activity cost pools by applying the percentages in the Distribution of Resource Consumption Across Activity Cost Pools table to the respective costs. For example, the first entry in the table is computed as follows: 0.30 × $24,000 = $7,200. b.Computation of activity rates: c.Assign overhead costs to products:Overhead cost for Product S8: Overhead cost for Product F1: d.Determine product margins: Overhead cost for Product F1:
a.Assign overhead costs to activity cost pools by applying the percentages in the Distribution of Resource Consumption Across Activity Cost Pools table to the respective costs. For example, the first entry in the table is computed as follows: 0.30 × $24,000 = $7,200. b.Computation of activity rates: c.Assign overhead costs to products:Overhead cost for Product S8: Overhead cost for Product F1: d.Determine product margins: d.Determine product margins:
a.Assign overhead costs to activity cost pools by applying the percentages in the Distribution of Resource Consumption Across Activity Cost Pools table to the respective costs. For example, the first entry in the table is computed as follows: 0.30 × $24,000 = $7,200. b.Computation of activity rates: c.Assign overhead costs to products:Overhead cost for Product S8: Overhead cost for Product F1: d.Determine product margins:

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