Business
Business, 02.07.2019 18:20, iggysouchet

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 $ 5,880 supervising $ 33,600 other $ 12,100 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: mhs (processing) batches (supervising) product m0 11,400 800 product m5 600 800 total 12,000 1,600 finally, sales and direct cost data are combined with processing and supervising costs to determine product margins. product m0 product m5 sales (total) $ 86,300 $ 98,400 direct materials (total) $ 30,200 $ 33,100 direct labor (total) $ 29,500 $ 43,400 what is the overhead cost assigned to product m5 under activity-based costing?

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Business, 22.06.2019 11:40, lmiranda5034
Zachary company produces commercial gardening equipment. since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. the costs and cost drivers associated with the four overhead activity cost pools follow: activities unit level batch level product level facility level cost $ 64,800 $ 27,730 $ 15,000 $ 154,000 cost driver 2,400 labor hrs. 47 setups percentage of use 11,000 units production of 780 sets of cutting shears, one of the company’s 20 products, took 240 labor hours and 7 setups and consumed 15 percent of the product-sustaining activities. required: (a) had the company used labor hours as a company wide allocation base, how much overhead would it have allocated to the cutting shears? (b) how much overhead is allocated to the cutting shears using activity-based costing? (c) compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 780 units are produced. if direct product costs are $150 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system? (d) assuming that activity-based costing provides a more accurate estimate of cost, indicate whether the cutting shears would be over- or underpriced if direct labor hours are used as an allocation base. explain how over-or undercosting can affect vaulker's profitability. (e) comment on the validity of using the allocated facility-level cost in the pricing decision. should other costs be considered in a cost- plus pricing decision? if so, which ones? what costs would you include if you were trying to decide whether to accept a special order?
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