Classic Pen Co$.$: Developing an ABC Model

Harvard Business School Case #$103-015$

Case Software # XLS$-666-$ Classic Pen Company: Developing an ABC Model

$1.$ Based on the activity information collected by Dempsey determine the Overhead applied to each product under ABC cost model by

a$.$ Identifying the activities under the ABC model presented

b$.$ Determining the total cost per activity under the ABC model presented

c$.$ Determine the cost$-$driver for each activity

d$.$ Determine the $ rate per cost driver unit identified in $($c$)$

e$.$ Calculate the overhead for each of the four products

$2.$ Prepare a new income statement based on ABC overhead costs for each of the four products.