Activity Based Costing

Activity Based Costing Timeplece Corporation manufactures travel clock and watches. Overhead costs are currently allocated using direct labor-hours, but the controller has recommended using an ABC system based on the following data: Activity level Activity Cost driver Cost, $ Travel Clocks Watches Production setup 170,000 60,000 120,000 setups 10 15 Materlal handling parts 12 18 Packaging and shipping units shipped 40,000 60,000 Total overhead 350,000 A. Compute the amount of total overhead allocated to each of the products under ABC B. Compute the amount of total overhead allocated to each product using labor-hours as the allocation base. Assume labor-hours required to assemble each unit are 0.5 per travel clock and 1.0 per watch, and that 40 000 travel clocks and 60 000 watches were produced 1 2 3