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1. apply ABC and calculate the cost per unit of Product A 4) The president of Raymond's Manufacturing Company (RMC), Dr. Jerry Leung, believes
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1. apply ABC and calculate the cost per unit of Product A
4) The president of Raymond's Manufacturing Company (RMC), Dr. Jerry Leung, believes that the traditional costing system does not reflect the totality of overhead costs in production. Even though RMC is a small manufacturing company (10 people, and it just started their business, Dr. Leung still wants to apply activity-based costing (ABC). The company has two products: FOAM-1 and FOAM-2. The annual production and sales of Product FOAM-1 is 8,000 units and of Product FOAM-2 is 6,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows: Activity Cost Pool Estimated Cost Activity 1 $20,000 Activity 2 |37,000 Activity 3 91,200 (Disclose ALL supporting calculation steps) Expected Activity Product A Product B 100 400 800 200 1800 3,000 Total 500 1,000 3,8000
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