Shalom Company has identified an activity cost pool to which it has allocated estimated overhead of P1,920,000. It has determined the estimated use of cost drivers for that activity to be 160,000 inspections. Product 2A require 40,000 inspections, Product 28 30,000 inspections, and Product 3B, 90,000 inspections. Shalom Company uses direct labor hours to allocate the overhead in a traditional method. Direct labor hours for Products 2A, 2B, and 3B are 43,000, 67,000, and 82,000, respectively. Comparing traditional and activity-based methods of allocating overhead, indicate if the products were over or under cost. Use the underlined words in capital letters as your choice.

Shalom Company has identified an activity cost pool to which it has allocated estimated overhead of P1,920,000. It has determined the estimated use of cost drivers for that activity to be 160,000 inspections. Product 2A require 40,000 inspections, Product 28 30,000 inspections, and Product 3B, 90,000 inspections. Shalom Company uses direct labor hours to allocate the overhead in a traditional method. Direct labor hours for Products 2A, 2B, and 3B are 43,000, 67,000, and 82,000, respectively. Comparing traditional and activity-based methods of allocating overhead, indicate if the products were over or under cost. Use the underlined words in capital letters as your choice.

Name: Shalom Company has identified an activity cost pool to which it has a
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Description: Shalom Company has identified an activity cost pool to which it has allocated estimated overheadof P1,920,000. It has determined the estimated use of cost drivers for that activity to be 160,000inspections. Product 2A require 40,000 inspections, Pro

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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