A company manufactures two product types: Product A and Product B. The company uses an activity-based costing (ABC) system that allocates all of its overhead to three cost pools. The activity rates for the three cost pools are in the table below: Activity Cost Pool Machining Factory Setups Product Design Activity Cost rate $20/MH $100/setup $6,000 per product type The following Table is information for Product A Product Type Machine Hours Number of setups Number of units Direct Labor Hours Overhead Costs: Machining Product A 3,000 MH Direct Material Cost Labor wage rate $25/DLH Calculate the total product cost assigned to Product A if Activity Based Costing is used. Use the Table below as guide: Product A Total Product Costs ($) Direct Material Costs Direct Labor Costs Factory Setups Product Design Total Product Costs 230 setups 10,000 units 7,000 DLH $8.00/unit ? ? ? ? ? ?

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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A company manufactures two product types: Product A and Product B.
The company uses an activity-based costing (ABC) system that allocates all of its overhead to three cost pools. The activity rates for the
three cost pools are in the table below:
Activity Cost rate
$20/MH
Activity Cost Pool
Machining
Factory Setups
Product Design
type
The following Table is information for Product A:
Product Type
Machine Hours
Number of setups
Number of units
Direct Labor Hours
$100/setup
$6,000 per product
Direct Material Costs
Direct Labor Costs
Overhead Costs:
Machining
Factory Setups
Product Design
Total Product Costs
Product A
3,000 MHs
230 setups
Direct Material Cost
Labor wage rate
$25/DLH
Calculate the total product cost assigned to Product A if Activity Based Costing is used. Use the Table below as guide:
Product A
Total Product Costs ($)
?
10,000 units
7,000 DLH
$8.00/unit
?
?
?
?
?
Transcribed Image Text:A company manufactures two product types: Product A and Product B. The company uses an activity-based costing (ABC) system that allocates all of its overhead to three cost pools. The activity rates for the three cost pools are in the table below: Activity Cost rate $20/MH Activity Cost Pool Machining Factory Setups Product Design type The following Table is information for Product A: Product Type Machine Hours Number of setups Number of units Direct Labor Hours $100/setup $6,000 per product Direct Material Costs Direct Labor Costs Overhead Costs: Machining Factory Setups Product Design Total Product Costs Product A 3,000 MHs 230 setups Direct Material Cost Labor wage rate $25/DLH Calculate the total product cost assigned to Product A if Activity Based Costing is used. Use the Table below as guide: Product A Total Product Costs ($) ? 10,000 units 7,000 DLH $8.00/unit ? ? ? ? ?
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