Problem

Assigning Costs Using Activity ProportionsRefer to the information presented in E4-3. Supp...

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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