308 Chapter 9 30. Carnation Company has two products: A and B. The company uses. The estimated activity-based costing to determine product costs. overhead costs and expected activity for each of the company's three overhead activity centers are as follows: Estimated Activity Overhead Expected Activity Product A Total Product B Centerbrit Costs 700 300 1,000 Activity I P32,600 200 600 800 P17,600 Activity 2 P52,500 400 500 Activity 3 100 The predetermined overhead rate under the activity based costing system for Activity 3 is closest to: a. P525.00. C. P105.00. b. P 44.65. 27d. P205.00.
308 Chapter 9 30. Carnation Company has two products: A and B. The company uses. The estimated activity-based costing to determine product costs. overhead costs and expected activity for each of the company's three overhead activity centers are as follows: Estimated Activity Overhead Expected Activity Product A Total Product B Centerbrit Costs 700 300 1,000 Activity I P32,600 200 600 800 P17,600 Activity 2 P52,500 400 500 Activity 3 100 The predetermined overhead rate under the activity based costing system for Activity 3 is closest to: a. P525.00. C. P105.00. b. P 44.65. 27d. P205.00.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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No. 30 please provide solution
Transcribed Image Text:308 Chapter 9
30. Carnation Company has two products: A and B. The company uses.
The estimated
activity-based costing to determine product costs.
overhead costs and expected activity for each of the company's three
100/1
overhead activity centers are as follows:
Estimated
Activity
Overhead
Expected Activity
Product A
Product B
Total
Center nebri Costs
700
300
1,000
P32,600
Activity I
600
200
800
P17,600
Activity 2
400
100
500
P52,500
Activity 3
The predetermined overhead rate under the activity based costing
system for Activity 3 is closest to:
a.
P525.00.
C. P105.00.
P205.00.
b.
P 44.65.
d.
V. Problems
Problem 1
Peejay Autoparts, Inc., previously used a cost system that allocated all
factory overhead costs to products based on 350 percent of direct labor cost.
The company has just implemented an ABC system that traces indirect costs
to products based on consumption of major activities as indicated below.
Compare the total annual costs of Product X using both the traditional
volume-based and the new ABC systems.
Annual Cost Driver
Activity
Quantity
Cost
Product X Cost
Driver Consumption
Labor
P300,000
P 30,000
Machining
20,000 hours
P10,000
800 hours
Setup
P500,000
10,000 hours
P100,000
100 hours
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