The manufacturing division of an electronics company uses activity-based costing.The company has identified three activities and the related cost drivers for indirect production costs.
Three types of products are produced.Direct costs and cost-driver activity for each product for a month are as follows:
Indirect production costs for the month are as follows:
Required:
A)Compute the indirect production costs allocated to each product using the ABC system.
B)Compute the indirect production costs allocated to each product using a traditional costing system.Assume indirect production costs are allocated to each product using the cost driver: direct labor hours.

Question

The manufacturing division of an electronics company uses activity-based costing.The company has identified three activities and the related cost drivers for indirect production costs.
  Three types of products are produced.Direct costs and cost-driver activity for each product for a month are as follows:
  Indirect production costs for the month are as follows:
  Required: 
A)Compute the indirect production costs allocated to each product using the ABC system. 
B)Compute the indirect production costs allocated to each product using a traditional costing system.Assume indirect production costs are allocated to each product using the cost driver: direct labor hours.

Quizplus · Accepted Answer

The Answer of The manufacturing division of an electronics company uses activity-based costing.The company has identified three activities and the related cost drivers for indirect production costs.
  Three types of products are produced.Direct costs and cost-driver activity for each product for a month are as follows:
  Indirect production costs for the month are as follows:
  Required: 
A)Compute the indirect production costs allocated to each product using the ABC system. 
B)Compute the indirect production costs allocated to each product using a traditional costing system.Assume indirect production costs are allocated to each product using the cost driver: direct labor hours.

The Manufacturing Division of an Electronics Company Uses Activity-Based Costing