Business, 16.03.2020 20:19 simeragrundy14
Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because of these product differences, the company wants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows:
Activity Pools Cost Pool Total Cost Driver
Repair and maintenance on assembly machine $82,600 Number of units produced
Programming cost 84,600 Number of programming hours
Software inspections 7,280 Number of inspections
Product testing 9,800 Number of tests
Total overhead cost $184,280
Expected activity for each product follows:
Number of Units Number of Programming Hours Number of Inspections Number of Tests
Decoder P 18,000 1,900 184 1,200
Decoder Q 41,000 1,700 76 1,600
Total 59,000 3,600 260 2,800
Required:
Compute the overhead rate for each activity pool. Determine the overhead cost allocated to each product.
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Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires m...
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