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1. What are the main advantages and disadvantages of the activity-based costing system? List and describe three main advantages and three main disadvantages. 3. Borleau
1. What are the main advantages and disadvantages of the activity-based costing system? List and describe three main advantages and three main disadvantages. 3. Borleau Corporation has an activity-based costing system with three activity cost pools-- Supporting direct labor, Setting up machines, and General factory. The company makes two products: Basic Product and Deluxe Product. Annual production and sales are 1,700 units of Basic Product and 1,100 units of Deluxe Product. The estimated overhead costs and expected activity for next period are as follows: Activity Cost Pools and Estimated Expected Activity Activity measures Overhead Costs Basic Deluxe Product Product Supporting direct labor $30,528 1,000 600 (DLHS) Setting up machines $17,385 1,700 (setups) General factory (MHS) $50.872 510 660 Total $98.785 200 a. Calculate the activity rate for each activity cost pool using activity-based costing. b. Determine the amount of overhead cost that would be assigned to each product using activity-based costing
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