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A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted costs and activities. Use this
A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted costs and activities. Use this information to compute (a) the company's overhead rates for each of the three activities and (b) the total amount of overhead allocated to Product A. Show your work. Budgeted Budg Overhead Activity Cost Pool Cost Prodi Activity 1-machine 380 $200,000 set up batch 1,800 Activity2-grinding $150,000 Mach 1,190 Activity 3-polishing $220,000 Direc Total budgeted $570,000 overhead A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted costs and activities. Use this information to compute (a) the company's overhead rates for each of the three activities and (b) the total amount of overhead allocated to Product A. Show your work. Budgeted Budg Overhead Activity Cost Pool Cost Prodi 380 Activity 1-machine $200,000 set up batch 1,800 Activity2-grinding $150,000 Mach 1,190 Activity 3-polishing $220,000 Direc Total budgeted overhead $570,000 Budgeted Activity Product A Product B 380 1,580 batches batches 1,800 800 Machine hours Machine hours 1,190 10,790 Direct labor hours Direct labor hours Total 1,960 batches 2,600 Machine hours 11,980 Direct labor hours
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