Question

Do It! Review 4-2 a-c Flynn Industries has three activity cost pools and two products. It estimates production 2,000 units of Product BC113 and 1,000 of Product AD908. Having identified its activity cost pools and the cost drivers for each pool, Flynn accumulated the following data relative to those activity cost pools and cost drivers. Estimated Use of Cost Drivers per Product Annual Overhead Data Estimated Overhead $15,600 86,190 30,250 Estimated Use of Cost Drivers per Activity Activity Cost Pools Machine setup Machining Packing Cost Drivers Setups Machine hours Orders 39 5,070 550 Product BC113 29 1,080 200 Product AD908 10 3,990 350 Using the above data, do the following Your answer is correct. Prepare a schedule showing the computations of the activity-based overhead rates per cost driver Activity Cost Estimated Overhead Estimated Use of Cost Drivers per Activity Activity-Based Overhead Rates Pools Machine setup 15600 39 setups 400 per setup Machining 86190 5070 machine hours 17 per machine hr Packing 30250 550 orders 55 per order 132040 SHOW ANSWER

Answer 1

Answer

• In correct of parts of the answers are answered below:

	BC113			AD908
Activity Cost Pool	Estimated use of cost drivers	Activity based overhead rates	Cost assigned	Estimated use of cost drivers	Activity based overhead rates	Cost assigned
Machine Setup	29	$400	$11,600	10	$400	$4,000
Machining	1080	$17	$18,360	3990	$17	$67,830
Packing	200	$55	$11,000	350	$55	$19,250
Total Assigned Cost			$40,960			$91,080

	BC113	AD908
Overhead cost assigned (A)	$40,960	$91,080
Estimated units (B)	2000	1000
Overhead cost per unit = ANSWERS = A/B	$                   20.48	$                 91.08