Gable Company uses three activity cost pools. Each pool has a cost driver. Infor

Question

Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows:

Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows:

Required:
Using activity rates, determine the amount of overhead assigned to each product. (Round activity rates to 2 decimal places. Round your other intermediate calculations and final answer to the nearest whole dollar amount.)

Activity Cost Pools Total Cost of Pool Cost Driver Estimated Cost Driver Machining $ 380,120 Number of machine hours 88,400 Designing costs 86,400 Number of design hours 9,000 Setup costs 74,672 Number of batches 525

Explanation / Answer

Calculate activity rate :

determine the amount of overhead assigned to each product.

Activity cost pool Total cost of pool Cost driver expected activity activity rate Machining 380120 No of machine hour 88400 4.3 per Mh designing cost 86400 No of design hour 9000 9.6 per dh setup cost 74672 no of batches 525 142.23 per batch

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