Question No.5 Hunter Company manufactures two products (XX and YY). The overhead costs have been divided into four cost pools that use the following activity drivers. Product Number of Orders Number of Set-ups Number of Labor Transactions Labor Hours XX YY Cost per pool 60 20 Rs.16,000 20 80 Rs.13,000 50 70 Rs.2,400 2,000 500 Rs.20,000 Required: Compute the allocation rates for each of the activity drivers listed. Allocate the overhead costs to product XX and product YY using activity-based costing. Compute the overhead rate using machine hours under the functional-based costing system
Question No.5 Hunter Company manufactures two products (XX and YY). The overhead costs have been divided into four cost pools that use the following activity drivers. Product Number of Orders Number of Set-ups Number of Labor Transactions Labor Hours XX YY Cost per pool 60 20 Rs.16,000 20 80 Rs.13,000 50 70 Rs.2,400 2,000 500 Rs.20,000 Required: Compute the allocation rates for each of the activity drivers listed. Allocate the overhead costs to product XX and product YY using activity-based costing. Compute the overhead rate using machine hours under the functional-based costing system
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question No.5
Hunter Company manufactures two products (XX and YY). The
Product |
Number of Orders |
Number of Set-ups |
Number of Labor Transactions |
Labor Hours |
XX YY Cost per pool |
60 20 Rs.16,000 |
20 80 Rs.13,000 |
50 70 Rs.2,400 |
2,000 500 Rs.20,000 |
Required:
- Compute the allocation rates for each of the activity drivers listed.
- Allocate the overhead costs to product XX and product YY using activity-based costing.
- Compute the overhead rate using machine hours under the functional-based costing system.
- Allocate the overhead cost to Product XX and YY using the functional-based costing system overhead rate calculated in part ©.
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