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

question 48

Essay

Zwahlen Corporation has an activity-based costing system with three activity cost pools--Processing, Setting Up, and Other. Costs in the Processing 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 and activity-based costing system 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.

---

Definitions:

Carolus Linnaeus

A Swedish botanist, zoologist, and physician who laid the foundations for the modern scheme of binomial nomenclature.

Aristotle

An ancient Greek philosopher and polymath during the Classical period in Ancient Greece who made contributions to numerous fields of science and knowledge, including biology, ethics, logic, and politics.

Thomas Malthus

An English economist and demographer, known for his theory that population growth will always outpace the food supply, leading to societal collapse.

Stable

An attribute of systems, conditions, or environments that maintain consistency and resist sudden change or degradation over time.