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Thanks! Oakland Company makes two products, Product A and Product B. Data regarding the two products follow: Direct Labor-Hours per Unit 0.90 0.30 Annual Production
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Oakland Company makes two products, Product A and Product B. Data regarding the two products follow: Direct Labor-Hours per Unit 0.90 0.30 Annual Production 29,000 48,000 Product A Product B units units Additional information about the company follows: a. Product A require $32 in direct materials per unit, and Product B require $16 per unit. b. The direct labor wage rate is $10 per hour. c. Product A require special equipment and are more complex to manufacture than Product B. d. The ABC (activity-based costing) system has the following activity cost pools: Estimated Activity Activity Cost Pool (Activity Measure) Overhead Cost Product A Product B Machine setups (number of setups) $15,300 90 80 Special processing (machine-hours) $128,000 3,200 0 General factory (organization-sustaining) $103,100 NA NA (There is no activity rate for the General Factory activity because it is an organization- sustaining activity. Organization-sustaining costs are not allocated to products.) Total 170 3,200 NA Required: 1. Compute the activity rate for each of the following activity cost pools. (Complete the worksheet below.) Activity Cost Pool (a) Estimated Overhead Cost (b) Expected Activity (c) Activity Rate Machine setups setups per setup Special processing MHs per MHStep by Step Solution
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