Neas Corporation Has an Activity-Based Costing System with Three Activity

question 272

Essay

Neas Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and Other. The company's overhead costs have already been allocated to the cost pools and total $25,200 for the Machining cost pool, $17,200 for the Setting Up cost pool, and $41,600 for the Other cost pool.Costs in the Machining 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. Data concerning the two products and the company's costs appear below:
Required:a. Calculate activity rates for each activity cost pool using activity-based costing.b. Determine the amount of overhead cost that would be assigned to each product using activity-based costing.c. Determine the product margins for each product using activity-based costing.

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Definitions:

Serous Membrane

A thin membrane lining certain internal cavities of the body, secreting serous fluid to lubricate the surfaces.

Visceral Layer

The inner layer of a two-part serous membrane that covers internal organs.

Pleura

A double-layered membrane surrounding the lungs and lining the chest cavity, facilitating lung movement and serving as a protective layer.

Serous Membrane

A serous membrane is a thin layer of tissue that lines certain internal cavities of the body, secreting a serous fluid that lubricates and reduces friction between organs.