Concept explainers
a
The overhead cost that has been allocated to 5,000 units of PFT200.
b
The overhead cost that has been allocated to 5,000 PFT200 using activity-based costing.
c
The overhead cost per unit for PFT200 using direct labor hour and activity-based costing and the product-selling price for each allocation system.
d
Whether PFT200 would be under-priced or overpriced suppose Company O uses direct labor as the allocation base and explain the manner in which over or under costing would affect Company O profitability.
e
Comment on the rationality of using the allocated facility-level costs in pricing decisions and is it necessary to include the other costs in cost-plus pricing decisions and if it is necessary what are all the cost to be included.
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