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

question 120

Essay

Benoist 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 $17,200 for the Machining cost pool, $7,700 for the Setting Up cost pool, and $52,100 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.

---

Definitions:

Circular Mil

An area measure of wire determined by squaring the diameter of the wire in mils (1 mil = 0.001 inch). Example: A wire with a diameter of 0.020 inch would have a circular mil area of 400 cmil (20 x 20 = 400).

Radius

A straight line from the center to the circumference of a circle or sphere.

Diameter

A straight line passing from side to side through the center of a body or figure, especially a circle or sphere, measuring the overall distance across.

Standard Temperature

A baseline temperature used in scientific calculations, typically defined as 0°C or 273.15K.