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RS Company manufactures and distributes two products, R and S. Overhead costs are currently allocated using the number of units produced as the allocation base.
RS Company manufactures and distributes two products, R and S. Overhead costs are currently allocated using the number of units produced as the allocation base. The controller has recommended changing to an activity-based costing (ABC) system. She has collected the following information: Activity Cost Driver Product S Amount Product R Production setups Number of setups $ 900,000 100 60 Material handling Number of parts 140 486,000 200 Packaging cost Number of units 15,840 534,600 9,000 1,920,600 What is the total overhead allocated to Product R using the current system? a boo ou beaso Using ABC, what was the amount of Material Handling costs consumed by Product R? c Using ABC, what was the amount of Production setup costs consumed by Product S? o What is the total overhead amount allocated to Product S using activity-based costing (ABC)? d
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