Business, 17.03.2020 04:13 imhacking2048

Adelberg Company has two products: A and B. The annual production and sales of Product A is 2,050 units and of Product B is 1,450 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor-hours per unit and Product B requires 0.7 direct labor-hours per unit. The total estimated overhead for next period is $102,700. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools--Activity 1, Activity 2, and Order Size--with estimated overhead costs and expected activity as follows: Estimated Expected Activity Activity Cost Pools Overhead Costs Product A Product B Total Activity 1 $ 31,734 1,350 950 2,300 Activity 2 18,075 2,050 550 2,600 Order Size 52,891 820 1,015 1,835 Total $ 102,700 (Note: The Order Size activity cost pool's costs are allocated on the basis of direct labor-hours.) The predetermined overhead rate (i. e., activity rate) for Activity 2 under the activity-based costing system is closest to.

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Adelberg Company has two products: A and B. The annual production and sales of Product A is 2,050 un...

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