Alabama Paper Company manufactures three products (computer paper, newsprint, an

Question

Alabama Paper Company manufactures three products (computer paper, newsprint, and specialty paper) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows:

The activity bases identified for each activity are as follows:

The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows:

Each product requires 0.9 machine hour per unit.

If required, round all per unit amounts to the nearest cent.

1. Determine the activity rate for each activity.

2. Determine the total and per-unit activity cost for all three products. Round per unit answers to the nearest cent.

Activity Activity Cost Pool Production $547,500 Setup 164,400 Moving 84,600 Shipping 129,600 Product Engineering 79,100 Total $1,005,200

Explanation / Answer

http://www.chegg.com/homework-help/questions-and-answers/problem-26-4a-activity-based-product-costing-alabama-paper-company-manufactures-products-c-q3912335

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