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304 Chapter 8 Problem 8-3: Compute overhead using ABC System. Gigabytes Computers, Inc. manufactures two styles of computer keyboards, the Multimedia Keyboard and the Comfort

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304 Chapter 8 Problem 8-3: Compute overhead using ABC System. Gigabytes Computers, Inc. manufactures two styles of computer keyboards, the Multimedia Keyboard and the Comfort Type Keyboard The company uses activity based costing to allocate overhead costs to its products. The following activity centers have been identified: Activity Center Cost Driver Allocation Rate Material Handling 5% of material cost Machine Setup Cost of materials Assembly No. of setups No. of keyboards P320 per setup Inspection P 24 per keyboard Packaging and Shipping No. of keyboards No. of orders P 10 per keyboard P 20 per order Multimedia Keyboards Comfort Type Keyboards No. of keyboards 400 No. of setups 45 700 No. of orders 9 25 Material costs P12,000 16 P15,400 Required: 1. Compute the total overhead costs assigned to each type of keyboard 2. Compute the overhead cost per keyboard for each type of keyboard

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