#6.1 Hakara Company has been using direct labor costs as the basis for assigning

Question

#6.1

Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system product A has been assigned overhead of $21.70 per unit while product B has been assigned $10.44 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information:

Use activity-based costing to determine a unit cost for each product. (Round your final answers to 2 decimal places.)

Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system product A has been assigned overhead of $21.70 per unit while product B has been assigned $10.44 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information:

Explanation / Answer

1.

The correct answer is :

Note :

1. Activity rates :

2.

Product A Overhead :

3.

Product A Cost:

4. Product B Overhead

5. Product B Cost :

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