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

question 55

Essay

Deraney 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 $5,800 for the Machining cost pool, $4,700 for the Setting Up cost pool, and $7,500 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 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.

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Definitions:

Compliance-Gaining Technique

Strategies used to persuade or induce others to align with one's requests or directions.

Elaboration Likelihood Model

A theory suggesting two primary pathways (central and peripheral) through which persuasion occurs, based on the depth of processing.

Heuristic/nonconscious Processing

Mental short cuts or automatic processing strategies the brain uses to make quick decisions or judgments.

Rule Of Law

When members of a society (including its most powerful leaders) respect and follow its rules.