Comprehensive In Class ABC Problem

A manufacturer makes two types of snowmobiles. Basic and Deluxe, and reports the following data to be used in applying activity-based costing. The company budgets production of 6,000 Basic snowmobiles and 2,000 Deluxe snowmobiles.

Activity Pool Activity Cost Driver Cost assigned Basic Deluxe

Machine setup Number of setups $150,000 200 batches 300 batches

Materials handling Number of parts $250,000 10 per unit 20 per unit

Machine depreciation Machine Hours $720,000 1 MH per unit 1.5 MH per unit

Total Overhead $1,120,000

1. Compute overhead activity rates for each activity cost pool using ABC
2. Compute the total amount of overhead cost to be allocated to each product line using ABC
3. Compute the overhead cost per unit for each product line using ABC