GMD manufactures 3 products, brake systems, stability systems and power steering. Figure 1 presents activities with its corresponding driver for each product. Figure 2 presents total overhead costs for each activities.

REQUIRED:

a. Allocate costs ABC method for each product.

b. Allocate costs plantwide method for each product using machine hours as allocation rate

c. If GMD manufactures 11,000 brake systems, 12,000 stability systems and 9,000 power steering systems, how much will be the overhead cost per product under each method?

Exercise 1 Figure 1 Stabili Power Steerin Brake Activ Driver System System Machine Setups Engineerin Factory Maintenance Power Assembl Cuttin # of setups design modifications Square Foot KW hours Direct Labor hours Machine Hours 7 10,000 25,000 5,000 10,000 12,000 35,000 7,000 8,000 8,000 20,000 8,000 7,000 Figure 2 Activit Costs Machine Setups ngineerin Factory Maintenance Power Assembl Cuttin 90,000 300,000 50,000 60,000 560,000 400,000 GMD manufactures 3 products, brake systems, stability systems and power steering. Figure 1 presents activities with its corresponding driver for each product. Figure 2 presents total overhead costs for each activities REQUIRED a. b. c. Allocate costs ABC method for each product. Allocate costs plantwide method for each product using machine hours as allocation rate If GMD manufactures 11,000 brake systems, 12,000 stability systems and 9,000 power steering systems, how much will be the overhead cost per product under each method