Acton Company Has Two Products: a and B

question 103

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 (i.e.,activity rate) for Activity 1 under the activity-based costing system is closest to which of the following?

• A) $13.17.
• B) $24.15.
• C) $28.97.
• D) $83.66.

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Definitions:

Landslide Blocks

Large pieces of rock or soil that have moved down a slope in a mass movement event, often due to gravity or seismic activity.

Location of Rock

The specific geological setting or area where a rock type is found or originates from.

Volcanic Eruptions

The violent expulsion of magma, ash, and gases from a volcano, often associated with lava flow and pyroclastic debris.

Topography

The general configuration of a surface, especially the land surface or seafloor, including its elevation, relief, and features; shape of the land.