Reference no: EM13588940

1.Dideda Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system:

Costs:
Manufacturing overhead	$360,000
Selling and administrative expenses	240,000
Total	$ 600,000

Distribution of resource consumption:

Activity Cost Pools

	Order Size	Customer Support	Other	Total
Manufacturing overhead	25%	65%	10%	100%
Selling and administrative expenses	60^	20%	20%	100%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. You have been asked to complete the first-stage allocation of costs to the activity cost pools. How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool?

2. Ormond Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been allocated to the company's three activity cost pools as follows: Machining, $6,800; Order Filling, $10,700; and Other, $4,500. Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data appear below:

Activity:	MHs (Processing)	Batches (Supervising)
Product B6	1,300	400
Product R1	18,700	600

What is the overhead cost assigned to Product B6 under activity-based costing?

3. Ibarra Company, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $81 Units in beginning inventory 0 Units produced 6,900 Units sold 6,600 Units in ending inventory 300 Variable costs per unit: Direct materials $22 Direct labor $28 Variable manufacturing overhead $6 Variable selling and administrative $5 Fixed costs: Fixed manufacturing overhead $69,000 Fixed selling and administrative $66,000 What is the unit product cost for the month under variable costing?

4. Thoen Nuptial Bakery makes very elaborate wedding cakes to order. The company has an activity-based costing system with three activity cost pools. The activity rate for the Size-Related activity cost pool is $0.96 per guest. (The greater the number of guests, the larger the cake.) The activity rate for the Complexity-Related cost pool is $54.24 per tier. (Cakes with more tiers are more complex.) Finally, the activity rate for the Order-Related activity cost pool is $56.44 per order. (Each wedding involves one order for a cake.) The activity rates include the costs of raw ingredients such as flour, sugar, eggs, and shortening. The activity rates do not include the costs of purchased decorations such as miniature statues and wedding bells, which are accounted for separately.
Data concerning two recent orders appear below:

	Nie Wedding	Strobl Wedding
Number of reception guests	67	129
Number of tiers on the cake	3	5
Cost of purchased decorations for cake	$ 23.50	$ 31.31

Assuming that the company charges $584.18 for the Strobl wedding cake, what would be the overall margin on the order?

5. Roshannon Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment expense and indirect labor-to three activity cost pools-Processing, Supervising, and Other-based on resource consumption. Data to perform these allocations appear below:

Overhead costs:
Equipment expense	$52,000
Indirect labor	$ 8,000

Distribution of Resource Consumption across Activity Cost Pools:

Activity Cost Pools

	Processing	Supervising	Other
Equipment expense	0.20	0.30	0.50
Indirect labor	0.40	0.40	0.20

In the second stage, 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 for the company's two products follow:

	MHs (Processing)	Batches (Supervising)
Product P3	8,700	600
Product G0	11,300	1,400
Total	20,000	2,000

Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.

Sales and Direct Cost Data:	Product P3	Product G0
Sales (total)	$140,100	$121,500
Direct materials (total)	$ 47,500	$ 56,400
Direct labor (total)	$ 78,200	$ 37,700

What is the product margin for Product P3 under activity-based costing?

6. The Bronco Birdfeed Company reported the following information:

Sales (400 cases)	$100,000
Variable expenses	60,000
Contribution margin	40,000
Fixed expenses	35,000
Net operating income	$5,000

How much will the sale of one additional case add to Bronco's net operating income?