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Company Ltd. manufactures 2 products, Product F and Product G. The company expects to produce and sell 1,600 units of Product F and 3,000 units
Company Ltd. manufactures 2 products, Product F and Product G. The company expects to produce and sell 1,600 units of Product F and 3,000 units of Product G during the current year. The company uses activity-based costing to compute the per unit costs for external reports. Data relating to the company's three activity cost pools are given below for the current year. | ||||
Expected Activity | ||||
Activity Cost Pool | Estimated Overhead Costs | Product F | Product G | Total |
Machine setups | 14,960 | 130 | 90 | 220 |
Purchase orders | 63,360 | 650 | 1,110 | 1,760 |
General factory | 32,240 | 1,280 | 1,200 | 2,480 |
Required Using the activity-based costing approach, determine: 1) The overhead rates for each activity cost pool (HINT: Use the Total Expected Activity for each activity cost pool) 2) The overhead cost charged to each product (F and G) 3) The overhead cost/unit for each product (F and G) |
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