Question

Markham Company makes two products Base Product and Product and production and a for applying all manufacturing overhead to products Basic Products 4 tabor hours The company is considering switching to anavy based costing system for the purpose of com Activity 2. and General Factory with estimated overhead costs and expected t o 2.000 of Product and 10 of D o dact the company has and P res c hours per Theo d roducts for the based on our decora te oret perdis 735 pos t Overhead - Expected Activity Acorey Cost Pool Basic Pr o duct Activity 2 Generaatory 1000020 The overhead cost perfe c t under the traditional cong e st $4156 564 $2138 5984

Answer 1

Correct answer----------$41.56

Working

Calculation of Activity rates
Activity Cost Pool	Activity driver	Overhead Cost (A)	Expected Activity (B)	Activity rate (A/B)
Total overhead	Number of labor hour	$ 99,735	1920	$             51.95	Per labor hour

.

Cost assigned to Deluxe
Activity name	Activity Rates	Activity	ABC Cost
	(A)	(B)	(A x B)
Overhead	$           51.95	1,120.00	$ 58,178.75
Total Overheads assigned			$             58,178.75
Production			1,400.00
Overhead cost per unit			$ 41.56