ABC Problem 1 - Tebow Tebow Inc. manufactures three products and it is estimated that the following activity take piace during next roduction eriod: Product B Total machine Machine Direct material Total output costs per unit ($ hours per unit hours worked units) 10,000 20,000 1 ,ooo 14 17 22 0.5 1.5 -z 1.0 Indirect manufacturing overheads for the period are estimated at $360,000. Overheads are currently to products using the total number of machine hours worked. The company is about to implement an activ\iy- based costing (ABC) system and analysis of overhead has identified the following cost poo\s, cost drivers and product support activities: Overhead cost pools Machine maintenance Setu costs Materials orderin Finishin activit Product testin Total overhead Product Number of set ups 3 6 9 153,000 62,100 89,100 21 ,600 34 200 Activity-based cost drivers Machine hours worked Number of set-ups Number of materials orders Number of finishing hours Number of product tests Material orders 200 I ,480 300 Number of finishing hours 120 100 20 Number of product tests 50 25 75 ABC Problem 1 - Tebow Tebow Inc. manufactures three products and it is estimated that the following activity take piace during next roduction eriod: Product B Total machine Machine Direct material Total output costs per unit ($ hours per unit hours worked units) 10,000 20,000 1 ,ooo 14 17 22 0.5 1.5 -z 1.0 Indirect manufacturing overheads for the period are estimated at $360,000. Overheads are currently to products using the total number of machine hours worked. The company is about to implement an activ\iy- based costing (ABC) system and analysis of overhead has identified the following cost poo\s, cost drivers and product support activities: Overhead cost pools Machine maintenance Setu costs Materials orderin Finishin activit Product testin Total overhead Product Number of set ups 3 6 9 153,000 62,100 89,100 21 ,600 34 200 Activity-based cost drivers Machine hours worked Number of set-ups Number of materials orders Number of finishing hours Number of product tests Material orders 200 I ,480 300 Number of finishing hours 120 100 20 Number of product tests 50 25 75