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pls explain how you got your numbers Overhead Costs Cost Driver Volume Pencils Activity Cost Pool Setting up Cost Driver 30 number of setups 6

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Overhead Costs Cost Driver Volume Pencils Activity Cost Pool Setting up Cost Driver 30 number of setups 6 number of parts S72.000 20 21,600EE 43,200 and sh 45,0005000 Inumber of boxes shipped Total S 136,800 Pencils Pens 0.1 45,000 4.500 02 75,000 15,000 Labor hours per box Number of boxes Total labor hours .-- Compute the amount of overhead allocated to each product under ABC Overhead Costs Total Level of Cost Driver Activity Cost Pool Setting up Pool Rate 72 000 S 21,600 per set up per part per box shipped S 28 Packing and shipping 30 31 32 Overhead Cost Cost Driver Volume Pens Pens Activity Cost Pool Setting up Pool Rate Pencils 30 Packing and shipping 36 . Compute the armount of overhead allocated toeach product using labor hours as the allocation base: Manufacturing overhead Labor hours Predetermined overhead rate per labor hour 46 Pencils Total labor hours Predetermined overhead rate Overhead costs 50 52 C. Should the company follow the controller's recommendations? Not necessarly Activity-based costing provides a more accurate allocation of overhead costs. However, the more accurate method is also more expensive. The ABC system shoukd be adopted if the benefits from improved information exceed the addtional costs required to obtain the information Instructions 9-40 Hand In

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