Company X is considering switching to an activity-based costing system for computing unit product costs. 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: Expected Activity Activity Cost Pool (Activity Measure)Estimated Overhead CostsProduct AProduct B Total Activity 1 (Machine Hours) $/20,272 300 500 800 Activity 2 (Number of Parts) 29,380 800 5001,300 General Factory (Direct Labor Hours) 21.634 160 420 580 Total. $/71.286
Company X is considering switching to an activity-based costing system for computing unit product costs. 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: Expected Activity Activity Cost Pool (Activity Measure)Estimated Overhead CostsProduct AProduct B Total Activity 1 (Machine Hours) $/20,272 300 500 800 Activity 2 (Number of Parts) 29,380 800 5001,300 General Factory (Direct Labor Hours) 21.634 160 420 580 Total. $/71.286
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Company X is considering switching to an activity-based costing system for computing unit product costs.
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:
Expected Activity
Activity Cost Pool (Activity Measure) Estimated Overhead CostsProduct AProduct B Total
$/20,272
Activity 1 (Machine Hours)
Activity 2 (Number of Parts)
General Factory (Direct Labor Hours)
Total.
300
500 800
29,380
800
5001,300
21.634
160
420 580
$/71,286
The activity rate ($) for Activity 2 under the activity-based costing system is closest to:
O a. None of the given answers
ОБ. 36.73
O c. 22.60
O d. 25.34
Oe.
67.53
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