Alliance Company manufactures two products (brushes and combs). The overhead costs have been divided into four cost pools that use the following activity drivers.
| |
# of Setups
|
# of Orders
|
Machine Hours
|
Packing Orders
|
|
Brushes
|
30
|
35
|
2,000
|
100
|
|
Combs
|
10
|
65
|
6,000
|
150
|
|
Cost per Pool
|
$20,000
|
$10,000
|
$280,000
|
$60,000
|
Required
- Compute the allocation rates for each of the activity drivers listed.
- Allocate the overhead costs to Products S and T using activity-based costing.
- Compute the overhead rate using machine hours under the functional-based costing system.
- Allocate the overhead costs to Products S and T using the functional-based costing system overhead rate calculated in part (c).