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Problem 4: Tims Timekeepers Inc. manufactures three types of products: Sundials, Wall Clocks, and Grandfather Clocks. The company uses an activity-based costing system. At the

Problem 4:

Tims Timekeepers Inc. manufactures three types of products: Sundials, Wall Clocks, and Grandfather Clocks. The company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its three cost pools:

Cost Pool

Cost Driver

Expected Overhead Cost

Total Expected Activity

Labor-related

Direct labor hours

$156,200

22,000 hours

Clock Face etching

Number of units

$89,600

14,000 units

General factory

Square footage

$180,200

170,000 square feet

Expected activity for the year was distributed among the companys three products as follows:

Expected Activity

Cost Pool

Cost Driver

Sundials

Wall

Grandfathers

Labor-related

Direct labor hours

6,000

11,000

5,000

Clock face etching

Number of units

5,000

8,000

1,000

General factory

Square footage

30,000

80,000

60,000

Assume the actual amounts equaled the budgeted amounts. If the company uses the activity based costing method, how much of the overhead will be allocated to each of the products?

Problem 4: Tims Timekeepers Inc. manufactures three types of products: Sundials, Wall Clocks, and Grandfather Clocks. The company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its three cost pools: Cost Pool Cost Driver Expected Overhead Cost Total Expected Activity Labor-related Direct labor hours $156,200 22,000 hours Clock Face etching Number of units $89,600 14,000 units General factory Square footage $180,200 170,000 square feet Expected activity for the year was distributed among the companys three products as follows: Expected Activity Cost Pool Cost Driver Sundials Wall Grandfathers Labor-related Direct labor hours 6,000 11,000 5,000 Clock face etching Number of units 5,000 8,000 1,000 General factory Square footage 30,000 80,000 60,000 Assume the actual amounts equaled the budgeted amounts. If the company uses the activity based costing method, how much of the overhead will be allocated to each of the products?

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