Brewster Company makes two products: Product C and Product D. Annual production and sales are 1,450 units of Product C and 910 units of Product D. The company has traditionally used direct labor hours as the basis for applying all manufacturing overhead to products. Product C requires 0.42 direct labor hours per unit and Product D requires 0.75 direct labor hours per unit. The total estimated overhead for the next period is $94,380. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools-Activity 1, Activity 2, and General Factory-with estimated overhead costs. and expected activity as follows: Activity Estimated Cost Pool Overhead Expected Activity Cost Product C Product D Total Activity 1 $31,920 1,500 520 2,020 Activity 2 14,832 1,350 190 1,540 General 38,964 420 540 960 Factory Total $85,716 The predetermined overhead rate under the traditional costing system is_

Brewster Company makes two products: Product C and Product D. Annual production and sales are 1,450 units of Product C and 910 units of Product D. The company has traditionally used direct labor hours as the basis for applying all manufacturing overhead to products. Product C requires 0.42 direct labor hours per unit and Product D requires 0.75 direct labor hours per unit. The total estimated overhead for the next period is $94,380. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools-Activity 1, Activity 2, and General Factory-with estimated overhead costs. and expected activity as follows: Activity Estimated Cost Pool Overhead Expected Activity Cost Product C Product D Total Activity 1 $31,920 1,500 520 2,020 Activity 2 14,832 1,350 190 1,540 General 38,964 420 540 960 Factory Total $85,716 The predetermined overhead rate under the traditional costing system is_

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 1PB: Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven...

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