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Pomme Company uses activity-based costing to compute product costs for extemal reports. The company has three activity cost pools and applies overhead using predetermined overhead
Pomme Company uses activity-based costing to compute product costs for extemal reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity centres Activity Centre Batch Schups Material Handling General Factory Estimated Overhead Costs $20,400 $$2.800 $78,000 Expected Activity 1.200 2.400 2.000 Actual costs and activities for the current year were as follows: Activity Centrs Batch Setups Material Handling General Factory Actual Overhead Costs $20,740 $52.10 $77.520 Actual Activity 1.230 2.470 2.680 d General Factor Actual costs and activities for the current year were as follows: Activity Centre Barch Schups Material Handling General Factory Actual Overhead Corts $20.7.40 $52.360 $77.590 Actual Activity 1230 2.470 2.680 Required: a) Calculate the overhead rates per Activity Centre and how much total overhead was applied to products during the year? (6 marks) b) By how much was overhead overapplied or underapplied? (Be sure to clearly label your answer as to whether the overhead was overapplied or underapplied for each activity centre as well as for the total.)
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