Apply activity cost allocation rates (Learning Objective 2)

Narnia Technology uses ABC to allocate all of its conversion costs (direct labor and manufacturing overhead). Narnia’s Cell Phone Department, which assembles and tests digital processors, reports the following data regarding processor G27:

The activities required to build the processors are as follows:

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

Transcribed Image Text:

Direct materials cost.... Activity costs allocated......... Manufacturing product cost... $56.00 $ ?