Homework SourseGable Company uses three activity cost pools Each pool has a
Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows:
Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows:
Required:
Using activity rates, determine the amount of overhead assigned to each product. (Round activity rates to 2 decimal places. Round your other intermediate calculations and final answer to the nearest whole dollar amount.)
| Activity Cost Pools | Total Cost of Pool | Cost Driver | Estimated Cost Driver | ||
| Machining | $ | 380,120 | Number of machine hours | 88,400 | |
| Designing costs | 86,400 | Number of design hours | 9,000 | ||
| Setup costs | 74,672 | Number of batches | 525 | ||
Solution
Calculate activity rate :
determine the amount of overhead assigned to each product.
| Activity cost pool | Total cost of pool | Cost driver | expected activity | activity rate |
| Machining | 380120 | No of machine hour | 88400 | 4.3 per Mh |
| designing cost | 86400 | No of design hour | 9000 | 9.6 per dh |
| setup cost | 74672 | no of batches | 525 | 142.23 per batch |
