Compute cost that is assigned to each bicycle product line

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The controller is not satisfied with the traditional method of allocating overhead because he believes that most of the overhead costs relate to the family tent product line because of its complexity. He therefore developed the following three activity cost pools and related cost drivers to better understand the costs.

Question 1: Activity Cost Pools Expected Use of Cost Drivers Estimated Overhead Costs (SAR) Setting up machines 1,000 setups 220,000 Assembling 90,000 labor hours 990,000 Inspection 1,200 inspections 240,000 Calculate the activity-based overhead rates for these three cost pools.

Question 2: Compute the cost that is assigned to each bicycle product line using activity-based costing system, given the following information.

Question 3: Expected Use of Cost Drivers per Product Small Family Number of setups 150 850 Direct labor hours 30,000 60,000 Number of inspections 100 1,100 What do you believe the controller should do and why?

Reference no: EM132693187

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