Narnia Technology uses ABC to allocate all of its manufacturing overhead. Narnia€™s Cell
Phone Department, which assembles and tests digital processors, reports the following data regarding processor G27:
Direct materials cost.................................................................................. $14.00
Direct labour cost...................................................................................... $42.00
Manufacturing overhead allocated............................................................ ?
Manufacturing product cost...................................................................... $ ?
The activities required to build the processors are as follows:

1. Fill in the blanks in both the opening schedule and the list of activities.
2. Why might managers favour this ABC system instead of the older system that allocated all MOH costs on the basis of direct labour?

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Cost Allocated to Each Board Activity Start station Dip insertion Manual insertion Wave solder Backload Test Defect analysis Total Allocation Base $ 0.90= $0.90 Number of processor boards Number of dip insertions Number of manual insertions Number of processor boards soldered Number of backload insertions Standard time each processor board is in test activity (hr) Standard time for defect analysis and repair (hr.) 20 S 0.25 $ ?= 2.00 × 4.50 = 4.50 $0.70= 2.80 0.15 × 0.16 x S?8.00 $90.00 =