Pomme Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity centres: activity centre estimated overhead cost expected activity Batch Setups 20,400 1,200 material handling 52,800 2,400 General Factory 78,000 2,600 Actual costs and activities for the current year were as follows: Activity Centre Actual overhead costs Actual Activity Batch Setups 20,740 1,230 Material Handling 52,360 2,470 General Factory 77,590 2,680 Required: a) Calculate the overhead rates per Activity Centre and how much total overhead was applied to products during the year? b) By how much was overhead overapplied or underapplied? (Be sure to clearly label your answer as to whether the overhead was overapplied or underapplied for each activity centre as well as for the total.
Pomme Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies
activity centre estimated overhead cost expected activity
Batch Setups 20,400 1,200
material handling 52,800 2,400
General Factory 78,000 2,600
Actual costs and activities for the current year were as follows:
Activity Centre Actual overhead costs Actual Activity
Batch Setups 20,740 1,230
Material Handling 52,360 2,470
General Factory 77,590 2,680
Required:
a) Calculate the overhead rates per Activity Centre and how much total overhead was applied to products during the year?
b) By how much was overhead overapplied or underapplied? (Be sure to clearly label your answer as to whether the overhead was overapplied or underapplied for each activity centre as well as for the total.
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