Acton Company Has Two Products: a and B

question 63

Multiple Choice

Acton Company has two products: A and B. The annual production and sales of Product A is 800 units and of Product B is 500 units. The company has traditionally used direct labour hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labour hours per unit, and Product B requires 0.2 direct labour hours per unit. The total estimated overhead for next period is $92,023.

The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools-Activity 1, Activity 2, and General Factory-with estimated overhead costs and expected activity as follows:
(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labour hours.)

-The predetermined overhead rate under the traditional costing system is closest to which of the following?

• A) $13.17.
• B) $21.60.
• C) $37.46.
• D) $270.66.

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Definitions:

Experimental Group

the group in an experiment that receives the treatment or intervention being tested.

Control Group

In experimental research, the group of subjects not exposed to the treatment or intervention being tested, serving as a benchmark to measure the effects of the treatment.

Discipline Of Psychology

The scientific study of mind and behavior, encompassing various subfields such as cognitive, developmental, clinical, and social psychology.

Science Of Behavior

The systematic study of how behavior is affected by the environment and other stimuli.