Flynn Industries has three activity cost pools and two products. It expects to produce 3,000 units of Product BC113 and 1,500 of Product AD908. Having identified its activity cost pools and the cost drivers for each pool, Flynn accumulated the following data relative to those activity cost pools and cost drivers.

Using the above data, do the following:
(a) Prepare a schedule showing the computations of the activity-based overhead rates per cost driver.
(b) Prepare a schedule assigning each activity's overhead cost to the two products.
(c) Compute the overhead cost per unit for each product. (Round to nearest cent.)
(d) Comment on the comparative overhead cost perproduct.
 

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Annual Overhead Data Expected Use of Cost Drivers per Product Expected Use of Cost Drivers per Activity Estimated Product Product Activity Cost Pool Machine setup Machining Packing Cost Drivers Overhead BC113 AD908 Setups Machine hours $ 16,000 110,000 30,000 40 25 15 5,000 1,000 4,000 Orders 500 150 350 Annual Overhead Data Expected Use of Cost Drivers per Product Expected Use of Cost Drivers per Activity Estimated Product Product Activity Cost Pool Machine setup Machining Packing Cost Drivers Overhead BC113 AD908 Setups Machine hours $ 16,000 110,000 30,000 40 25 15 5,000 1,000 4,000 Orders 500 150 350

Answer rating: 100% (QA)

Answer Activitybased overhead rates Estimated overhead Estimated use of cost drivers per activity ... View the full answer