Hunter Company Manufactures Two Products (XX and YY) ACompute the Allocation Rates for Each of the Activity Drivers

question 40

Essay

Hunter Company manufactures two products (XX and YY). The overhead costs have been divided into four cost pools that use the following activity drivers: $\begin{array}{ccccc}&\text { Number of }&\text { Number of }&\text { Number of Labour } &\text { Labour } \\\text { Product } &\text { Orders }&\text { Setups }&\text { Setups }&\text { Transactions }&\text { Hours }\\ \mathrm{XX} & 60 & 20 & 50 & \text { 2,000 } \\ \text { YY } & 20 & 80 & 70 & 500 \\\\\text { Cost per pool } & £ 16,000 & £ 13,000 & £ 2,400 & £ 20,000 \\\end{array}$
a.Compute the allocation rates for each of the activity drivers listed.
b.Allocate the overhead costs to Products XX and YY using activity-based costing.
c.Compute the overhead rate using labour hours under the traditional functional-based costing system.
d.Allocate the overhead costs to Products XX and YY using the traditional functional-based costing system overhead rate calculated in part (c).

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Definitions:

Genetic Factors

Elements within an organism's genetic makeup that influence its physical and behavioral traits, including susceptibility to diseases and conditions.

Intelligence

The ability to acquire and apply knowledge and skills.

Adopted Children

Individuals who have been legally taken and raised by parents other than their biological parents, often resulting in unique psychological and social dynamics.

Biological Parents

The birth parents of a child, providing the genetic material through reproduction.