Currambine Pty Ltd manufactures two products, Product C and Product D. In the current year Currambine produced 4,000 units of Product C and 2,000 units of Product D. The Company uses normal costing and activity-based costing (ABC) to allocate overheads. The following are the budgeted activity rates calculated for its three (3) activities:

activity Activity rate

machine set-ups $50

design $60

general factory $9

Actual data relating to these activities for the current period are given below: actual activity

activity cost pool actual overhead cost product C product D total

machine set-ups $13630 100 190 290

design $113750 500 1250 1750

general factory $68860 4160 2100 6260

total $196240

1.Calculate the unit manufacturing overhead cost for each product.

a.Classify each of the activity according to the cost hierarchy level; and

b.specify a possible allocation base/ cost driver.

Activity a.Cost Hierarchy Level b. Allocation base/ cost driver

1.Machine set-ups

2.Design

3.Calculate for each activity and in total:

a.The amountof overheads over or underallocated,

b.specifying clearly whether the amount is over or under allocated

Answer rating: 100% (QA)

Answer 1 Calculation of unit manufacturing overhead cost for each product For Product C Machine setu... View the full answer