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Activity-Based Product Corting Mello Manufacturing Company is a diversified manufacturer that manufactures three products (Alpha, Beta, and Omega) in a continuous production process. Senior management

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Activity-Based Product Corting Mello Manufacturing Company is a diversified manufacturer that manufactures three products (Alpha, Beta, and Omega) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows Activity Production Setup Material Handling Inspection Product engineering Total Activity Cost Pool $259,200 55,000 9,750 60,000 123,200 $507,150 The activity identified for each activity are as follows Activity Production Setup Materials handling Inspection Product engineering Activity Base Machine hours Number of setups Number of parts Number of inspection hours Number of engineering hours The activity base usage quantities and units produced for the three products were determined from corporate records and are as follows Number of Number of Machine Number of Number of Inspection Engineering Hours Setups Parts Hours Hours Units Alpha 1,440 75 65 400 125 1,800 Beta 1,060 165 HO 300 175 1,350 Omega 720 310 380 500 140 900 Total 3,240 550 325 1,200 440 4.050 Each product requires 48 minutes per unit of machine time

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