Question

Daba Company manufactures two products, Product F and Product G. The company expects to produce and sell 1,630 units of Product F and 2,060 units of Product G during the current year. The company uses activity-based costing to compute unit product costs for external reports. Data relating to the company's three activity cost pools are given below for the current year:

Total Activity
Activity Cost Pool Total Cost Product F Product G Total
Machine setups $ 37,290 144 setups 195 setups 339 setups
Purchase orders $ 165,240 890 orders 1,150 orders 2,040 orders
General factory $ 123,690 2,440 hours 4,070 hours 6,510 hours
Required:

Using the activity-based costing approach, determine the overhead cost for each product line. (Omit the "$" sign in your response.)

Product F Product G
Total Overhead cost $ _____ $ _____

Answer 1

Answer:

Explanation:

Activity cost pool:

• Machine setups

Cost = $37,290

Total activity for both products = 339

Overhead rate = $37,290/339 = $110

• Purchase orders

Cost = $165,240

Total activity for both products = 2040

Overhead rate = $165,240/2040 = $81

• General factory

Cost = $123,690

Total activity for both products = 6510

Overhead rate = $123,690/6510= $19

Product F total overhead cost:

Machine setups = $110*144 = $15,840

Purchase orders = $81*890 = $72,090

General factory = $19* 2,440 = $46,360

Total = $134,290

Product G total overhead cost:

Machine setups = $110*195= $21,450

Purchase orders = $81*1150= $93,150

General factory = $19* 4070= $77,330

Total = $191,930