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Adun Company makes products C and D. Information for overhead costs and for the two products appears below. The company makes 50,000 units of product
Adun Company makes products C and D. Information for overhead costs and for the two products appears below. The company makes 50,000 units of product C each year and 20,000 units of product D. Activity Driver Total Overhead Cost Product C Product D Setups # of setups $ 200,000 500 setups 1,500 setups Ordering parts # of parts $ 300,000 60,000 parts 40,000 parts # of machine Machining $ 600,000 12,000 machine hrs. 6,000 machine hrs. hours Inspections # of inspections $ 400,000 10,000 inspections 40,000 inspections Shipping # of shipments $ 300,000 20,000 shipments 10,000 shipments Total overhead $ 1,800,000 Q1. Assume that all overhead is assigned to products using machine hours. How much overhead would be assigned to each unit of Product C? Q2. What will be the unit overhead cost of product D if all overhead is assigned using ABC and each activity above is treated as a separate pool
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