PPG Company manufactures two products: Product SS and Product HH. During January 50 of product SS and
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Question:
PPG Company manufactures two products: Product SS and Product HH. During January 50 of product SS and 300 of product HH were incurred, and overhead costs of P81, 000 were incurred. An analysis of overhead costs reveals
the following activities:
Activity
Cost Driver
Total Cost
1.Materials handling
Number of requisitions
30, 000
2.Machine setups
Number of setups
27, 000
3.Quality inspections
Number of inspections
24, 000
The cost drive volume for each product was as follows:
Cost driver
Product SS
Product HH
Number of requisitions
400
600
Number of setups
150
300
Number of inspections
200
400
Instructions:
a.Determine the overhead rate for each activity
b.Allocate the manufacturing overhead costs to the two products using ABC.
Expert Answer:
To determine the overhead rate for each activity and allocate the manufacturing overhead costs to the two products using ActivityBased Costing ABC fol... View the full answer
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