Bachrodt Corporation Uses Activity-Based Costing to Compute Product Margins

question 278

Multiple Choice

Bachrodt Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools--Processing, Supervising, and Other. The costs in those activity cost pools appear below: Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below
Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.
What is the overhead cost assigned to Product Y7 under activity-based costing?

• A) $7,992
• B) $1,480
• C) $18,000
• D) $9,472

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Definitions:

Financial

Related to the management, investment, or collection of money, often within a business or organization.

Structural

Related to or involving the physical makeup or configuration of something, often referring to buildings, bridges, or other edifices.

Social Capital

The interconnectedness of people within a specific community, enabling the community to work effectively.

Day Care Center

A facility that provides care and education for children too young for primary school, often while their parents are at work.