Cost acc

Problem 2 (10 Points) - LO3 Farhan Corporation (FC) is diversified manufacturer of industrial goods. The company's activity-based costing system contain the following six activity cost pools and activity rates: ACTIVITY COST POOL ACTIVITY RATES Supporting direct labor $9 per direct labor-hour Machine processing $6 per machine-hour Machine setup $75 per setup Production orders $135 per order Shipments $21per shipment Product sustaining $1,260 per product Activity data have been supplied for the following two products: AA123 BB123 100 350 EXPECTED ACTIVITY Number of units produced per year Direct labor-hour Machine hour Machine setup Production orders Shipments Product sustaining 40 50 1 1 1 250 1750 8 8 20 1 2 Required: a. Determine the total overhead cost that would be assigned to each of the products listed above in the activity-based on costing system and give your explanation! (5 Points) b. If A company decides for using the policy of ABC, does the company still carry out the accounting process like recording a transaction, prepare a journal entry, posting ledger etc. Reveal your argumentation! (5 Points)