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ACME Incorporated has two main product lines and uses activitybased costing to allocate overhead. lt mass produces and sells rigid paddle boards and custom builds
ACME Incorporated has two main product lines and uses activitybased costing to allocate overhead. lt mass produces and sells rigid paddle boards and custom builds surf boards; each requiring a unique design. The activity,r cost pools are as follows: Activity Cost Fool Expected Activity Total Cost Activity Rates Customer orders 400 orders $ 1B, $ 400 Product design 450 designs Q 200 lvlilling 40,000 machine hours 32, 8 Customer service 1,500 customers 40 Other not applicable 285,000 nfa The sales manager would like to know how much overhead was allocated to the boards for the two product lines sold to its customer, ACE. The sales details were as follows: - a total of six orders four orders for 8 paddle boards per order: and two orders for 3 custom surf boards each order - a total of 1 Elm machine hours 1,600 for the paddle boards and 3130 for the custom surf boards - each board requires $450 in direct material and 14 labour hours; the direct labour rate is $29 per hour; PDHR is $5 per DLH
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