Item$6$

$9$

points

Time Remaining $56$ minutes $36$ seconds$00$:$56$:$36$

Item $6$

Time Remaining $56$ minutes $36$ seconds$00$:$56$:$36$

Exercise $5-6$ Assigning Overhead Cost to Products in ABC $($LO$2-$ CC$3,6,7)$

PoseiDon Inc. $($PDI$)$ recently started operations to obtain a share of the growing golfing market. PDI manufactures two models of specialty drivers: the Thunderbolt model and the Earthquake model. The company was formed as a partnership by two professional engineers and a professional golfer, none of whom had any accounting experience. The business has been very successful, and to cope with the increased level of activity, the partners have hired a professional accountant as their controller. One of the first improvements the controller wants is an update of the costing system, changing from a single overhead application rate using direct labour$-$hours to activity$-$based costing. The controller has identified the following three activities as cost drivers, along with the related cost pools:

Model Number of Materials

Requisitions Number of Product

Inspections Number of Orders

Shipped

Thunderbolt $450165157$

Earthquake $610235124$

Total costs in the cost pool $ $561,800$ $ $60,000$ $ $84,300$

Required:

Using ABC, prepare a schedule that shows the allocation of the costs of each cost pool for each model.