A company produces two products, Product A which sells for $ per unit, and Product B which sells for $ per unit, using three different activities: Design, which uses engineering hours as the cost driver; Machining, which uses machine hours as the cost driver; and Inspection, which uses the number of batches as the cost driver. The cost of each activity and usage of the cost drivers are as follows:
Activity Pool Driver Cost of Pool Usage by Product A Usage by Product B
Design engineering hours $
Machining machine hours
Inspection Batches
The company manufactures units of Product A and units of Product B per month. Each unit of Product A uses $ of direct materials and $ of direct labor, while each unit of Product B uses $ of direct materials and $ of direct labor.
Required:
Calculate the Design activity proportions for Products A and B
Calculate the Machining activity proportions for Products A and B
Calculate the Inspection activity proportions for Products A and B
Determine the indirect costs assigned to Product A
Determine the indirect costs assigned to Product B
