Cabigas Corporation Manufactures Two Products, Product C and Product D

question 224

Essay

Cabigas Corporation manufactures two products, Product C and Product D. The company estimated it would incur $167,140 in manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labor-hours. Data concerning the current period's operations appear below:
Required:a. Compute the predetermined overhead rate under the current method, and determine the unit product cost of each product for the current year.b. The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labor-hours. The activity-based costing system would use three activity cost pools. Data relating to these activities for the current period are given below:
Determine the unit product cost of each product for the current period using the activity-based costing approach. General factory overhead is allocated based on direct labor-hours.

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Definitions:

Adaptive

Characterized by or showing an ability to adjust to new conditions or environments, often used in the context of biological organisms or learning strategies.

Babinski Reflex

A neurological reaction in infants when the sole of the foot is stroked, causing the big toe to move upward; an indicator of nervous system development.

Toes

The digits of the foot in humans and other animals, which play a crucial role in balance, movement, and tactile sensing.

Stroking

The act of gently rubbing or touching something or someone, often in a manner that is soothing or affectionate.