Adelberg Company has two products: A and B. The annual production and sales of Product A Is 2,550 units and of Product B is 1,950 units. The company has traditionally used direct labor-hours as the basis for applytng all manufacturing overhead to products. Product A requires 0.5 direct labor-hours per unit and Product B requires 0.8 direct labor-hours per unit. The total estimated overhead for next perlod is $108,200 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 Order Size- with estimated overhead costs and expected activity as follows: Estimated Expected Activity Overhead Activity Cost Pools Activity 1 Activity 2 Order Size Costs Product A Product B Total $ 33,434 1,850 2,550 1,450 1,050 3,300 19,043 55,723 3,600 1,275 1,560 2,835 Total $ 108,200

Adelberg Company has two products: A and B. The annual production and sales of Product A Is 2,550 units and of Product B is 1,950 units. The company has traditionally used direct labor-hours as the basis for applytng all manufacturing overhead to products. Product A requires 0.5 direct labor-hours per unit and Product B requires 0.8 direct labor-hours per unit. The total estimated overhead for next perlod is $108,200 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 Order Size- with estimated overhead costs and expected activity as follows: Estimated Expected Activity Overhead Activity Cost Pools Activity 1 Activity 2 Order Size Costs Product A Product B Total $ 33,434 1,850 2,550 1,450 1,050 3,300 19,043 55,723 3,600 1,275 1,560 2,835 Total $ 108,200

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...

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