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) The manufacturing division of an electronics company uses activity-based costing. The company identified three activities and the related cost drivers for indirect production
) The manufacturing division of an electronics company uses activity-based costing. The company identified three activities and the related cost drivers for indirect production costs. Activity Activity I Activity 2 Activity 3 Cost Driver Direct materials cost Direct labor cost Kilowatt hours Three types ofproducts are produced. Direct costs and cost-driver activity for each productfor a month are as follows: Direct materials cost Direct labor cost Direct labor hours Kilowatt hours Product A S75,ooo S6,ooo 2,000 150,000 Product B $50,000 $1,000 I ,OOO 200,000 Product C $125,000 $3,000 2,000 150,000 Indirect production costs for the month are as follows: $30,000 Activity I 20.000 Activity 2 Activity 3 $66,000 A) Compute the indirect production costs allocated to each product using the ABC system? B) Compute the indirect production costs allocated to each product using a traditional costing system Assume indirect production costs are allocated to each product using the cost driver: direct hogrs ?
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