Advent Corporation has implemented an Activity Based Costing System. The company wants to use ABC on its two main products, V1 and V2, and three main activities as follows: ActivityCost Driver Overhead Amount Total Driver Volume Issuing Purchase Orders # of Purchase Orders $ 150,000 50,000 Reviewing Receiving Reports # of Receiving Reports $ 175,000 20,000 Making Phone Calls # of Phone Calls $ 450,000 100,000 During the year: Product V1 required 150 purchase orders; 150 receiving reports; and 200 phone calls. Product V2 required100 purchase orders; 400 receiving reports; and 350 phone calls. Required: a. Compute the pre-determined overhead rate for each cost pool. b. Compute the total manufacturing overhead cost for Product V1 and Product V2.
Question 3 Part I
Advent Corporation has implemented an Activity Based Costing System. The company wants to use
ABC on its two main products, V1 and V2, and three main activities as follows:
ActivityCost Driver
Issuing Purchase Orders # of Purchase Orders $ 150,000 50,000
Reviewing Receiving Reports # of Receiving Reports $ 175,000 20,000
Making Phone Calls # of Phone Calls $ 450,000 100,000
During the year:
Product V1 required 150 purchase orders; 150 receiving reports; and 200 phone calls.
Product V2 required100 purchase orders; 400 receiving reports; and 350 phone calls.
Required:
a. Compute the pre-determined overhead rate for each cost pool.
b. Compute the total
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