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    Practice exam questions, managerial accounting

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    Can you help me understand these problems??

    1. Kraska Corporation has provided the following data from its activity-based costing system:

    Activity Cost Pool Total Cost Total Activity
    Assembly $460,000 39,000 machine-hours
    Processing orders $33,750 950 orders
    Inspection $108,242 1,320 inspection-hours

    Data concerning one of the company's products, Product O11W, appear below:

    Selling price per unit $95.7
    Direct materials cost per unit $17.5
    Direct labor cost per unit $13
    Annual unit production and sales 330
    Annual machine-hours 900
    Annual orders 81
    Annual inspection-hours 29

    According to the activity-based costing system, the product margin for product O11W is (round activity rates to 2 decimal places):

    b. $4,290

    2. Dilloo Company 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:

    Manufacturing overhead $560,000
    Selling and administrative expenses $142,000
    Total $702,000

    Distribution of resource consumption:
    Activity Cost Pools
    Order Customer
    Size Support Other Total
    Manufacturing overhead 40% 50% 10% 100%
    Selling and administrative expenses 45% 35% 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?

    d. $245,700

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    Solution Preview

    Your tutorial is in Excel [ATTACHED] and consists of schedules ...

    Solution Summary

    Your tutorial is in Excel [ATTACHED] and consists of schedules that compute the activity rates and assign the overhead costs to the product as well as showing the stage one allocating for activity based costing. Click in cells to see computations.