value: 16.00 points PoseiDon Inc. (PDI) recently started operations to obtain a

Question

value: 16.00 points PoseiDon Inc. (PDI) recently started operations to obtain a share of the growing golfing market. PDI manufactures two models of specialty drivers: the Thunderbolt model and the Earthquake model. The company was formed as a partnership by two professional engineers and a professional golfer, none of whom had any accounting experience. The business has been very successful, and to cope with the increased level of activity, the partners have hired a professional accountant as their controller. One of the first improvements the controller wants is an update of the costing system, changing from a single overhead application rate using direct labour-hours to activity-based costing. The controller has identified the following hree activities as cost drivers, along with the related cost pools: Number of Materials Requisitions Number of Product Inspections Number of Orders Model Thunderbolt Earthquake Total costs in the cost pool 450 610 $561,800 165 235 $60,000 Shipped 157 124 $84,300 Required: Using ABC, prepare a schedule that shows the allocation of the costs of each cost pool for each model. Thunderbolt Earthquake Based on materials requisitions Based on product inspections Based on orders shipped Total costs allocated References eBook & Resources

Explanation / Answer

Activity rate Rate number of material Requistions (561800/(450+610) 530 number of product inspections 60,000/(165+235) 150 number of orders shipped 84300/(157+124) 300 Allocation thunder Earthquake bolt material requistion (530*450) ; (530*610) 238500 323300 product inspection (150*165); (150*235) 24750 35250 orders shipped (300*157) ;(300*124) 47100 37200 total cost allocated 310350 395750

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