Exercise 2 on ABC: The following information is available: Total Overheads $ 100 000 Costs relating to set ups 70% of overheads Costs relating to inspections 30% of overheads No of set ups No of inspections 100 setups 50 inspections a) Calculate the cost per driver (Cost Driver Rate) To produce product A No of set ups No of inspections 20 setups 3 inspections (Note the cost driver rate is the activity rate) b) Calculate the total overheads applicable to Product A.

Exercise 2 on ABC: The following information is available: Total Overheads $ 100 000 Costs relating to set ups 70% of overheads Costs relating to inspections 30% of overheads No of set ups No of inspections 100 setups 50 inspections a) Calculate the cost per driver (Cost Driver Rate) To produce product A No of set ups No of inspections 20 setups 3 inspections (Note the cost driver rate is the activity rate) b) Calculate the total overheads applicable to Product A.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 8MC: A company calculated the predetermined overhead based on an estimated overhead of $70.000, and the...

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