Explore BrainMass

Explore BrainMass

    Amount of overhead cost & ABC

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    2. Winston Corporation's activity-based costing system has three activity cost pools-Fabricating, Setting Up, and Other. Costs in the Fabricating 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. The activity rate for Fabricating is $1.08 per MH; the activity rate for Setting Up is $5.20 per batch. The following table shows the machine-hours and number of batches associated with each of the company's two products:

    Product H5 - 7000, MHs and 200 batches.
    Product L1 - 13,000 MHs and 1,800 batches

    Determine the amount of overhead cost that would be assigned to each product using activity-based costing.

    © BrainMass Inc. brainmass.com June 4, 2020, 2:23 am ad1c9bdddf
    https://brainmass.com/business/accounting/amount-overhead-cost-abc-455184

    Solution Preview

    (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. The activity rate for Fabricating is ...

    Solution Summary

    The solution discusses the amount of overhead cost that would be assigned to each product using ABC

    $2.19

    ADVERTISEMENT