b Exam (Ch 113) Help Save& Exit Check myw Greife Corporation\'s activity based c
ID: 2584936 • Letter: B
Question
b Exam (Ch 113) Help Save& Exit Check myw Greife Corporation's activity based costing system has three acivity cost pools-Machining, Setting Up, and Other. The company's overhead costs have already been allocated to these cost pools as follows $77,82 Setting Uup costs the Machining cost pool are assi ned to products based on machine hours MHE) and cossin the ettngup eost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. The following table shows the machine-hours and number of batches associated with each of the company's two products Product Total 0,8102, Additional data concerning the company's products appears below Sales (total) Direct materials (total) blrect lebor (total) $ 81,900 84-900 $ 92,000 62,500 Prex 7of16 lll Next > F11 8Explanation / Answer
ans)
1. Computation of activity rates for each activity cost pool
Machining = 77832 / 10810 = $7.2 per MH
Setting up = 95800 / 2000 = 47.9 per batch
2. Computation of overhead cost
Product K0 Product W9
Machining 18792 59040
(7.2 X 2610) (7.2 X 8200)
Setting up 57480 38320
(47.9 X 1200) (47.9 X 800)
_______________________________
Total cost 76272 97360
3) Computation of product margin for each product
Product K0 Product W9
Sales value 264300 250,000
Less: Direct materials (81900) (84900)
Direct labour (92000) (62300)
Total cost of machining and setting (76272) (97360)
Product margin 14128 5440
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