Bluefield has decided to use an ABC costing system and has identified the following detailed information...

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Bluefield has decided to use an ABC costing system and has identified the following detailed information...

Bluefield has decided to use an ABC costing system and has identified the following detailed information about its cost pools and cost drivers:


Activity cost pools
Materials handling	$67,840
Machine maintenance	$22,140

Cost drivers
Number of material moves	530
Number of machine hours	54,000

Required:
1. Calculate Bluefield’s activity rate for each cost pool.
2. Determine the amount of overhead assigned to Bluefield’s products if each has the following activity demands:

	Product A	Product B
Number of material moves	290	240
Number of machine hours	16,700	37,300

business accounting

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Answer 1

Answer #1

1) Activity rate

	Activity rate
Material handling	67840/530 = 128 per move
Machine maintenance	22140/54000 = 0.41 per MH

2) calculate overhead assigned

	Product A	Product B
Material handling	37120	30720
Machine maintenance	6847	15293
Total overhead	43967	46013

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Answer 2

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