3. Chapter 7: Spadaro Corporation has an activity-based costing system with three activity cost pools...
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3. Chapter 7: Spadaro 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: Activity Cost Pools Processing.... $3,000 Setting up Other. $9,800 $9.200 n MHs Batches Produet C Produet C Total Co5,800 300 10,000 1,000 Product CO $45,300 $19,600 $15,900 Product C4 $48,400 $16,900 24.200 Sales (Lotal) Direct materials (total)... Direct labor (total) 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. 2
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