Question
ABC; pricing Chester Inc. has identified activity centers to which overhead costs are assigned. The cost pool amounts for these centers and their selected
ABC; pricing Chester Inc. has identified activity centers to which overhead costs are assigned. The cost pool amounts for these centers and their selected activity drivers for the year follow. Activity Centers Activity Drivers Utilities Costs $4,680,000 90,000 machine hours 1,170 setups Scheduling and setup 4,258,800 Material handling 9,984,000 2,400,000 pounds of material The company's products and other operating statistics follow. Product A Product B Product C Direct costs Machine hours $312,000 $312,000 $351,000 Number of setups 45,000 195 15,000 570 30,000 405 Pounds of material 750,000 450,000 1,200,000 Number of units produced 60,000 30,000 90,000 Direct labor hours 48,000 27,000 75,000
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