Question: ABC Pool # Activity Cost Pool Activity Measure Total Activity Cost Pool Allocation Base 1 Machining Machine-hours $150,000.00
| ABC Pool # | Activity Cost Pool | Activity Measure | Total Activity Cost Pool | Allocation Base | |
| 1 | Machining | Machine-hours | $150,000.00 | <--Machine Hours | |
| 2 | Machine setups | Number of setups | $100,000.00 | <--Setups | |
| 3 | Machine Maintenance | Machine-hours | $20,000.00 | <--Machine Hours | |
| 4 | Inspection | Number of inspections | $50,000.00 | <--Inspections | |
| 5 | General Factory Costs | Direct Labor-hours | $200,000.00 | <--Direct Labor Hours | |
| $520,000.00 | <--Total Manufacturing Overhead | ||||
| Allocation Base for ABC Pool(s) # | Activity Measure | Total Amount of the Activity Allocation Base for All Units of Product A | Total Amount of the Activity Allocation Base for All Units of Product B | Total Amount of the Activity Allocation Base for All Units of Product C | |
| 1 and 3 | Machine-hours | 7,000 | 5,000 | 20,000 | |
| 2 | Number of setups | 60 | 70 | 150 | |
| 4 | Number of Inpections | 8,000 | 10,000 | 13,000 | |
| 5 | Direct Labor-hours | 7,000 | 5,000 | 8,000 | |
| Direct Costs for Products A, B & C | |||||
| Direct Costs: | Total Cost for All units Produced of Product A | Total Cost for All units Produced of Product B | Total Cost for All units Produced of Product Product C | ||
| Direct Material | $75,000 | $30,000 | $100,000 | ||
| Direct Labor | $60,000 | $40,000 | $70,000 | ||
|
| Number of Finished Units Produced | 12,000 | 8,000 | 7,000 | |
1. The company's plantwide overhead rate.
2. Using the traditional plantwide overhead rate , the amount of manufacturing overhead cost allocated to Products A, B, and C.
3. Total product cost for Products A, B, and C under the traditional plantwide overhead rate system.
4. Total product cost per unit for Products A, B, and C under the traditional plantwide overhead rate system.
5. The company switches to an ABC costing system for allocating overhead to product A, B and C.
Calculate the overhead activity rate for the four cost pools (machining, machine setups, inspections
and general factory)
6. Using the ABC system, calculate total manufacturing overhead cost assigned to Product A, B and C.
7. Using the ABC system, calculate total manufacturing overhead cost would be assigned to Products A, B and C.
8. Total product cost for Product A, B and C under the Activity based costing system?
9. Total product cost per unit for Product A, B and C under Activity Based Costing
system.
10. Which product was overcosted when using the Plantwide rate, in comparison to ABC Costing?
11. Which product was undercosted when using the Plantwide rate, in comparison to ABC Costing?
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