Pharoah Industries has three activity cost pools and two products. It expects to produce 2,800 units of Product SZ09 and 1,300 ofProduct NZ16. Having identified its activity cost pools and the cost drivers for each pool, Pharoah accumulated the following datarelative to those activity cost pools and cost drivers.Activity Cost PoolMachine set-upsAssemblingInspectionMachine set-upsCalculate the overhead rates.AssemblingInspectionSZ09 $Cost DriverSet-upsMachine hoursNZ16 $InspectionsGALA$LAAssign the overhead cost to the two products.taEstimatedOverhead$63,600354,0006,160Estimated Useof Cost Driversper set-up20017,700per inspection110per machine hourSZ09130NZ16607010,300 7,40050

Overhead cost to be allocated on each product by way of Total overhead cost / Estimated use of Cost…

Answered: oduct NZ16. Ha lative to those a…

Business

Accounting

oduct NZ16. Ha lative to those a Activity Cost Po Machine set-ups Assembling nspection

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 10EA: Customs has three cost pools and an associated cost driver to allocate the costs to the product. The...

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Question

Pharoah Industries has three activity cost pools and two products. It expects to produce 2,800 units of Product SZ09 and 1,300 of
Product NZ16. Having identified its activity cost pools and the cost drivers for each pool, Pharoah accumulated the following data
relative to those activity cost pools and cost drivers.
Activity Cost Pool
Machine set-ups
Assembling
Inspection
Machine set-ups
Calculate the overhead rates.
Assembling
Inspection
SZ09 $
Cost Driver
Set-ups
Machine hours
NZ16 $
Inspections
GA
LA
$
LA
Assign the overhead cost to the two products.
ta
Estimated
Overhead
$63,600
354,000
6,160
Estimated Use
of Cost Drivers
per set-up
200
17,700
per inspection
110
per machine hour
SZ09
130
NZ16
60
70
10,300 7,400
50

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