question3

Answer the following questions. 1. Identify two reasons why an activity-based costing system may be appropriate for Wall Dcor 2. Compute the activity based overhead rates for each of the four activities. 3. Discuss the implications of using operating capacity as the cost driver rather than the expected units sold when allocating fixed overhead costs. 4. (a) Allocate the overhead to the three product categories (unframed prints, steel framed prints, and wood-framed prints with matting), assuming that the estimate of the expected units sold is correct and the actual amount of overhead incurred equaled the estimated amount of $375,200. (b) Calculate the total amount of overhead allocated. Explain why the total overhead of $375,200 was not allocated, even though the estimate of sales was correct. What are the implications of this for management? Answer the following questions. 1. Identify two reasons why an activity-based costing system may be appropriate for Wall Dcor 2. Compute the activity based overhead rates for each of the four activities. 3. Discuss the implications of using operating capacity as the cost driver rather than the expected units sold when allocating fixed overhead costs. 4. (a) Allocate the overhead to the three product categories (unframed prints, steel framed prints, and wood-framed prints with matting), assuming that the estimate of the expected units sold is correct and the actual amount of overhead incurred equaled the estimated amount of $375,200. (b) Calculate the total amount of overhead allocated. Explain why the total overhead of $375,200 was not allocated, even though the estimate of sales was correct. What are the implications of this for management