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Shelley Company currently uses traditional kosting procedures, applying $400,000 of overhead to products X and Y on the basis of direct labor hours The firm
Shelley Company currently uses traditional kosting procedures, applying $400,000 of overhead to products X and Y on the basis of direct labor hours The firm is considering a shift to activity based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (5U), and number of parts components (PC) as cost drivers. Data on the cost pools and respective driver volumes follow. Pool No. 1 Pool No. 2 Pool No3 Pueductive Driver Su Driver PC X 600 30 1,500 Y 1,400 50 1,000 Cost $80,000 5140,000 $180,000 The overtad cont located to product by using traditional chapter 3 costing procedures would be $120.000 11400 121.30
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