Question: 1. calculate the activity rates for each activity under activity based costing 2. apply overhead to product A using activity based costing A Company has

1. calculate the activity rates for each activity under activity based costing

2. apply overhead to product A using activity based costing

A Company has two products A and B. Overhead costs are presently allocated to the two products based on the labor-hours used to produce each product. The chief financial officer has suggested converting to activity based costing, Activity Cost Driver Amount Prod A Prod B Total Production setup Number of setups $ 60,000 130 setups 120 setups 250 setups Quality Control Number of inspections $ 90,000 80 Inspections 70 Inspections 150 Inspections Delivery Number of units shipped 120.000 1,500 units 4,500 units 6,000 units Total Overhead $ 270,000 Using the data collected above

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