Helpful Division of X Company makes two products, Small and Large. The company has always used Conventional Costing (for financial reporting purposes), but this period wants to try using Activity-Based Costing to make better decisions. Information related to the current period is as follows: REQUIRED: (#1) Since the company has three activities, what are the three overhead application rates the company would use for activity-based costing? (ROUND EACH RATE TO THE NEAREST CENT and be sure to label the rates appropriately.) (#2) Using activity-based costing, what was the cost to manufacture one Small unit? (#3) Using activity-based costing, what was the cost to manufacture one Large unit?
Helpful Division of X Company makes two products, Small and Large. The company has always used Conventional Costing (for financial reporting purposes), but this period wants to try using Activity-Based Costing to make better decisions. Information related to the current period is as follows:
REQUIRED:
(#1) Since the company has three activities, what are the three overhead application rates the company would use for activity-based costing? (ROUND EACH RATE TO THE NEAREST CENT and be sure to label the rates appropriately.)
(#2) Using activity-based costing, what was the cost to manufacture one Small unit?
(#3) Using activity-based costing, what was the cost to manufacture one Large unit?
(#4) Based on what you learned about activity-based costing this week, how might Helpful Division managers use the new cost information from its activity-based costing system to better manage its operations?
Helpful Resource:
https://www.youtube.com/watch?v=PU3U_aMbKws
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