1. Assume the company currently uses departmental rates for allocating overhead. Calculate the pre-determined overhead rate for the Processing & Testing Department (based on Engineering hours) and the Procurement Department (based on Number of purchase orders). Round to three (3) places after the decimal.

2. Identify which activity cost pools can be combined.

3. After combining cost pools as appropriate, calculate the pre-determined overhead rates for each activity cost pool.

4. Calculate the cost of Product line A using the departmental rates calculated in #1.

5. Calculate the cost of Product line A using the ABC rates calculated in #3.

6. Is ABC better for Zeta Company? Why or why not?

Check Figures:

1. PDOR for Procurement = $272.50 per PO

2. There will be a total of six cost pools after combinations; 2 cost pools cannot be combined with other pools.

3. Making probe cards & Testing products PDOR is either $89.688 per development hour OR $17.938 per testing hour.

4. Total applied overhead = $378,437.50

5. The following six allocations should be made to A:

$100,000

$35,875

$71,500

$12,000

$115,250

$73,500

Total applied OH = $408,125

6. Departmental rates do not accurately measure causes of overhead of how overhead is consumed by A. Your answer must explain why this is true.

Please Provide by detail calculation and better in excel format, thank you so much.

The following budgeted information is available for Zeta Company: Activity Budgeted Activity Driver Cost Consumption of Drivers for Zeta's Product Lines Product A Product B Total Activity Driver Processing & Testing Developing test programs Making probe cards $400,000 Engineering hours 10,000 2,500 7,500 58,750 Development hours 4,000 400 3,600 Testing products 300,000 Test hours 20,000 2,000 18,000 Setups 40,000 Number of batches 100 55 45 Engineering design 80,000 Number of change orders 60 9 51 Handling lots 90,000 Number of moves 200 110 90 Subtotal, Processing $968,750 & Testing Procurement Number of purchase orders 2,500 500 2,000 Number of deliveries 3,000 600 2,400 Inspection hours 5,000 3,500 1,500 Purchasing 450,000 materials Unloading materials 60,000 Inspecting materials 75,000 Moving materials 30,000 Paying suppliers 66,250 Subtotal, 681,250 Procurement Total $1,650,000 Distance moved (feet) Number of invoices 3,000 1,250 2,100 250 900 1,000