Brian Company manufactures two products: X and Y. The overhead costs have been d
ID: 2562845 • Letter: B
Question
Brian Company manufactures two products: X and Y. The overhead costs have been divided into four activity pools that use the following cost drivers:
Product
Number of Materials Requisitions
Number of Machine Setups
Hours of Machine Operation
Number of Product Inspections
Product X
24
70
6,000
50
Product Y
16
230
3,000
110
Cost per Pool
$20,000
$180,000
$270,000
$41,600
Required:
a. Compute the unit activity costs for each of the cost drivers listed.
b. Assign the overhead costs to products X and Y using activity-based costing.
Product
Number of Materials Requisitions
Number of Machine Setups
Hours of Machine Operation
Number of Product Inspections
Product X
24
70
6,000
50
Product Y
16
230
3,000
110
Cost per Pool
$20,000
$180,000
$270,000
$41,600
Explanation / Answer
Compute the unit activity costs for each of the cost drivers listed
b. Assign the overhead costs to products X and Y using activity-based costing
Overhead overhead cost cost driver expected activity activity rate Material requisitions 20000 No of material requisitions 40 500 oer materia requisition Setup 180000 no of setups 300 600 per setup Machining 270000 machine hours 9000 30 per machine hour Inspection 41600 no of inspection 160 260 per inspectionRelated Questions
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