Design cost pool Assignment | College Homework Help

  • The Blossum Company has an activity –based costing system with three activity cost pools-Design, Marketing, and Other. The company’s overhead costs, which consist of equipment depreciation and indirect labor, have been allocated to the cost pools already.
  • Costs in the Design cost pool are assigned to products based on Direct Labor Hours (DLH’s) and the costs in the Marketing cost pool are assigned to products based on the number of cases. Costs in the other cost pool are not assigned to products.
  • Required
  • (1) Calculate activity rates for each activity cost pool using ABC
  • (2) Determine the amount of overhead cost that would be assigned to Product               Tulips using ABC
  • (3) Determine the product margin for Product Tulips using ABC

Activity Based Costing (ABC) Data Sets
Activity Cost Pools (in dollars)

Category                 Design        Marketing                    Other            Total

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Depreciation              $30,000           $8,000                $20,000          $58,000

Indirect Labor              $5,000          $3,000                   $4,000          $12,000

Total                              $35,000        $11,000                $24,000          $70,000