PROBLEM 4–18 Contrasting Activity-Based Costing and Conventional Product Costing LO4–2, LO4–3, LO4–4 Adria Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company’s five activity cost pools:

Required:

1. Compute the activity rate for each of the activity cost pools.

2. The expected activity for the year was distributed among the company’s four products as follows:

page 186 Using the ABC data, determine the total amount of overhead cost assigned to each product.

3. Assume that prior to implementing ABC, Adria used a conventional cost system that applied all manufacturing overhead to products based on machine-hours. Explain how the conventional cost assignments would differ from the activitybased cost assignments with respect to Product C.