ABC COSTING Yanbu ceramics has budgeted overhead costs of $706,000 o It has allocated overhead on a plant wide basis to its two products: Italian ceramic Spanish ceramic The company has decided to experiment with Activity-Based Costing. The company has created two activity cost pools and related activity cost drivers. o These two cost pools are: Cutting (cost driver is machine hours) Design (cost driver is number of setups). Overhead allocated to the cutting cost pool is $700,000 and $6,000 is allocated to the design cost pool. Additional information related to these pools is as follows. Italian Spanish Total Machine hours 150,000 100,000 250,000 Number of setups 700 800 1,500 A. List the activity cost pools, activity cost drivers and their overhead. Activity cost pools Cost drivers Estimated overhead B. Calculate the activity-based overhead rates. Expected Use of Cost Driver per Activity Activity- Based Overhead Rates Activity cost pools Estimated Overhead C. Calculate the total overhead costs assigned for both Italian and Spanish Ceramics. Italian EXPECTED USE OF COST DRIVER PER PROUDUCT ACTIVITY-BASED OVERHEAD RATES ACTIVITY COST POOLS COST ASSIGNED TOTAL OVERHEAD COST ASSIGNED Spanish EXPECTED USE OF COST DRIVER PER PRODUCT ACTIVITY-BASED OVERHEAD RATES COST ASSIGNED ACTIVITY COST POOLS TOTAL OVERHEAD COST ASSIGNED D. Using information in the question and answer in part C, calculate the OVERHEAD COST PER UNIT FOR BOTH Italian AND Spanish ceramics and with the information in the box below, what would be the PRODUCT COST PER UNIT for each? Italian Spanish Number of units produced: 100,000 Number of units produced: 70,000 Overhead Cost per unit: Overhead Cost per unit: Direct material per unit: $3.00 Direct labor per unit: $2.20 Product cost per Unit: Direct material per unit: $1.80 Direct labor per unit: $2.20 Product cost per Unit