31. Houseal Corporation has provided the following data from itsactivity-based costing system:
| Activity CostPool | Total Cost | Total Activity |
| Assembly | $ | 613,250 | 55,000 | machine-hours |
| Processing orders | $ | 46,170 | 1,500 | orders |
| Inspection | $ | 146,110 | 1,900 | inspection-hours |
|
Data concerning one of the company's products, Product W58B,appear below:
| | |
| Selling price per unit | $ | 113.70 |
| Direct materials cost perunit | $ | 48.14 |
| Direct labor cost per unit | $ | 11.62 |
| Annual unit production andsales | | 360 |
| Annual machine-hours | | 1,040 |
| Annual orders | | 60 |
| Annual inspection-hours | | 30 |
|
According to the activity-based costing system, the productmargin for product W58B is:
2. Doede Corporation uses activity-based costing to computeproduct margins. In the first stage, the activity-based costingsystem allocates two overhead accounts--equipment depreciation andsupervisory expense--to three activity cost pools--Machining, OrderFilling, and Other--based on resource consumption. Data to performthese allocations appear below:
| Overhead costs: | |
| Equipment depreciation | $ | 92,000 |
| Supervisory expense | $ | 4,000 |
|
Distribution of Resource Consumption Across Activity CostPools:
| Activity Cost Pools |
| Machining | Order Filling | Other |
| Equipment depreciation | 0.60 | 0.20 | 0.20 |
| Supervisory expense | 0.30 | 0.20 | 0.50 |
|
In the second stage, Machining costs are assigned to productsusing machine-hours (MHs) and Order Filling costs are assigned toproducts using the number of orders. The costs in the Otheractivity cost pool are not assigned to products.
Activity:
| MHs(Machining) | Orders (OrderFilling) |
| Product W1 | 4,200 | 800 |
| Product M0 | 15,800 | 200 |
| Total | 20,000 | 1,000 |
|
Finally, sales and direct cost data are combined with Machiningand Order Filling costs to determine product margins.
Sales and Direct Cost Data:
| Product W1 | Product M0 |
| Sales (total) | $ | 236,500 | $ | 262,000 |
| Direct materials (total) | $ | 90,900 | $ | 123,900 |
| Direct labor (total) | $ | 110,400 | $ | 76,100 |
|
The activity rate for the Machining activity cost pool underactivity-based costing is closest to:
3. In time-based activity-based costing, the practicalcapacity percentage is an estimate of the company’s capacity inrelation to its closest competitor. true or false
