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XYZ Company manufactures and distributes two products, M and XY. Overhead costs are currently allocated using the number of units produced as the allocation
XYZ Company manufactures and distributes two products, M and XY. 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 Amount M XY Production setups Material handling Number of setups Number of parts $ 82,000 8 12 48,000 56 24 Packaging costs Number of units 130,000 50,000 80,000 $ 260,000
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