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?
Definitions:
Spasmodic Coughing
A sudden, violent cough that comes in spasms, often indicative of respiratory conditions.
Vocalizations
Sounds produced to express or communicate emotions, thoughts, or desires, important in clinical assessments.
Tracheostomy Site
The surgically created opening in the neck leading directly to the trachea (windpipe) to aid breathing.
Inflammation
A biological response to harmful stimuli, characterized by redness, swelling, pain, and heat in the affected tissues.
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