Question
The companys activity-based costing system contains the following activity cost pools and activity rates: Activity Cost Pool Activity Rates Supporting direct labor $ 9 per
The companys activity-based costing system contains the following activity cost pools and activity rates:
Activity Cost Pool Activity Rates
Supporting direct labor $ 9 per direct labor-hour
Machine processing $ 5 per machine-hour
Machine setups $ 40 per setup
Production orders $ 160 per order
Shipments $ 120 per shipment
Product sustaining $ 875 per product
Activity data have been supplied for the following two products:
Total Expected Activity
P1 P2
Number of units produced per year 200 2,000
Direct labor-hours
1,100 50
Machine-hours
2,600 40
Machine setups
13 3
Production order
13 3
Shipments
26 3
Product sustaining
3 3
How much total overhead cost would be assigned to P1 and P2 under activity-based system? Show your workings.
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