Hill Manufacturing Uses an Activity-Based Costing System The Following Costs Are Reported

question 37

Essay

Hill Manufacturing uses an activity-based costing system. The company produces Model A and Model B. Information concerning the two products is as follows: $\begin{array} { l l l } & \text { Model A } & \text { Model B } \\ \text { Units produced } & 30,000 & 50,000 \\ \text { Direct labour hours } & 24,000 & 26,000 \\ \text { Engineering labour (hours) } & 4,000 & 6,000 \\ \text { Setups } & 20 & 30 \\ \text { Kilowatt hours } & 5,000 & 7,000 \end{array}$


The following costs are reported:

$\begin{array}{ll}\text { Power } & £ 12,000 \\\text { labour-related overhead } & 70,000 \\\text { Setups } & 60,000\end{array}$
a.Classify the following overhead activities as unit-level activities, batch-level activities, or product-level activities:PowerEngineeringSetups
b.Calculate the following:A cost pool rate for powerA cost pool rate for setupsA cost pool rate for engineering
c.Calculate the following:Power costs assigned to Model BSetups costs assigned to Model AEngineering costs assigned to Model A

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