Assigning Costs Using Activity Proportions
Refer to the information presented in E4-3. Suppose that Francis Company manufactures three products. Information about its three products follows:
| Product A | Product B | Product C |
Number of machine hours | 30,000 | 40,000 | 10,000 |
Number of designer hours | 3,200 | 1,800 | 3,000 |
Number of batches | 50 | 75 | 275 |
1.Using activity proportions, determine the amount of overhead assigned to each product.
2. Compare these results with those obtained using activity rates in E4-4.
3. Considering the information about these three products, comment on the likely impact of using a traditional costing system.
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