Activity Cost Pool Cost Driver Estimated Overhead Use per Product A Use per Product B Machine Setups Setups $144,000 6,000 2,000 Assembly Number of Parts 71,000 25,000 46,000 Machine Maintenance Machine Hours 200,000 13,000 37,000 Compare the overhead allocation using (A) the traditional allocation method and (B) the activity-based costing method. (Hint: the traditional method uses machine hours as the allocation base.) For those boxes in which you must enter subtractive or negative numbers use a minus sign.
Activity Cost Pool Cost Driver Estimated Overhead Use per Product A Use per Product B Machine Setups Setups $144,000 6,000 2,000 Assembly Number of Parts 71,000 25,000 46,000 Machine Maintenance Machine Hours 200,000 13,000 37,000 Compare the overhead allocation using (A) the traditional allocation method and (B) the activity-based costing method. (Hint: the traditional method uses machine hours as the allocation base.) For those boxes in which you must enter subtractive or negative numbers use a minus sign.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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| Activity Cost Pool | Cost Driver | Estimated |
Use per Product A |
Use per Product B |
| Machine Setups | Setups | $144,000 | 6,000 | 2,000 |
| Assembly | Number of Parts | 71,000 | 25,000 | 46,000 |
| Machine Maintenance | Machine Hours | 200,000 | 13,000 | 37,000 |
Compare the overhead allocation using (A) the traditional allocation method and (B) the activity-based costing method. (Hint: the traditional method uses machine hours as the allocation base.) For those boxes in which you must enter subtractive or negative numbers use a minus sign.
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