Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. sarno corporation has an activity-based costing sy

Sarno Corporation has an activity-based costing system with three activity cost pools- Processing, Batch Setup,...

90.2K

Verified Solution

Question

Accounting

Sarno Corporation has an activity-based costing system with three activity cost pools- Processing, Batch Setup, and Other. Costs in the Processing cost pool are assigned to products based on machine-hours (MHs) and costs in the Batch Setup 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
Batch Setup $9,800
Other $9,200

MHs Batches
Product #1 5,800 700
Product #2 4,200 300
Total 10,000 1,000

Product #1 Product #2
Sales (total) $45,300 $48,400
Direct materials (total) $19,600 $16,900
Direct labor (total) $15,900 $24,200

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.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students