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Q 3 - Flynn Industries has three Activity Cost Pools and two products. It expects to produce 2 , 7 5 0 units of Product
Q
Flynn Industries has three Activity Cost Pools and two products. It expects to produce
units of Product BC and
of Product AD Having identified its activity
Cost Pools and the Cost Drivers for each pool, Flynn accumulated the following data relative to those activity Cost Pools and Cost Drivers.
tableAnnual Overhead DatatableActivity CostPoolCost Drivers,tableEstimatedOverheadMachine Setup,Setups,MachiningMachine HrsPackingOrders,
tableExpected Use of Cost Drivers per ProducttableExpected Use of CostDrivers per ActivityProduct,Product
Using the above data, do the following:
a Prepare a schedule showing the computations of the ActivityBased Overhead rates per Cost Driver.
b Prepare a schedule assigning each activity's Overhead Cost to the two products.
c Compute the Overhead Cost per unit for each product. Round to nearest cent.
d Comment on the comparative Overhead Cost per product.
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