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Problem 2 Gigabytes Computers, Inc, manufactures two styles of computer keyboards, the multimedia Keyboard and the Comfort Type keyboard. The company uses activity based costing
Problem 2 Gigabytes Computers, Inc, manufactures two styles of computer keyboards, the multimedia Keyboard and the Comfort Type keyboard. The company uses activity based costing to allocate overhead costs to its products. The following activity centers have been identified: Cost Driver Allocation Cost of Materials 5% of materials cost No. of set ups Activity Center rate Material Handling Machine Set up Assembly Inspection Packaging and shipping No. of keyboards No. of keyboards No. of Orders P320 per setup P24 per keyboard P 10 per keyboard P 20 per order Multimedia Keyboards Comfort Type Keyboards No. of keyboards 400 700 45 25 No. of set ups 9 16 No. of Orders P12,000 P15,400 Material Cost Required: 1. Compute the total overhead costs assigned to each type of keyboard. 2. Compute the overhead cost per keyboard for each type of keyboard
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