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is $13.17 the correct answer ? Reference: 05-01 Acton Company has two products: A and B. The annual production and sales of Product A are
is $13.17 the correct answer ? Reference: 05-01 Acton Company has two products: A and B. The annual production and sales of Product A are 800 units and of Product B are 500 units. The company has traditionally used direct labour-hours as the basis for applying all manufacturing overhead to products Product A requires 0.3 direct labour-hours per unit and Product B requires 0.2 direct labour-hours per unit. The total estimated overhead for next period is $92,023. 2 The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools-Activity 1. Activity 2 and General Factory-with estimated overhead costs and expected activity as follows: S Activity Expected Activity Estimated Cost Pool Overhead Product A Costs Activity 1514,487 500 Activity 2 $64.800 2.500 General Factory $12.736 240 Total 592023 Product Total B 600 500 1.100 3.000 100 340 (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labour-hours.) The predetermined overhead rate (ie, activity rate) for Activity 1 under the activity based costing system is closest to: $13.17 524.15 $28.97 583.66 o ENO
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