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Acklin Company has two products: A and B. The annual production and sales of Product A is 600 units and of Product B is 900
Acklin Company has two products: A and B. The annual production and sales of Product A is 600 units and of Product B is 900 units. The company has traditionally used direct labor hours as the basis for applying all manufacturing overhead to products Product Arequires 0.5 direct labor.bours per unit and Product requires 0.3 direct labor hours per unit. The total estimated overhead for next period is $63,322. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools. Activity 1. Activity 2 and General Factory with estimated overhead costs and expected activity as follows: Activity Cost Pool Est Ovhd Cost Expected Acty. Prod A Expected Acty. Prod B Total Activity 1 $18.900 700 200 900 Activity 2 $ 15,631 1.000 100 1.100 General Factory $ 28,791 300 270 570 Total $ 63322 The ovethead cost per unit of Product A under the activity-based costing system is dosest to 52526 5744 54221 55555
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