Benz Corporation has identified activity pool to which overhead costs are assigned. The cost pool...
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Benz Corporation has identified activity pool to which overhead costs are assigned. The cost pool amounts for these pool and their selected activity drivers for 2020 are as follows: Activity Costs Activity Drivers Utilities $1.200.000 60.000 machine hours Scheduling and setup $1.092.000 780 setups Material Handling $2.560,000 1.600.000 pounds of material The company's products and other operating statistics follow Direct Costs Machine Hours Number of Setups Pounds of material Number of units produced Product A $80.000 30.000 130 500.000 40.000 Product B $80 000 10.000 380 300.000 20.000 Product C $90 000 20.000 270 800.000 60.000 Required: 1. Using activity-based costing (ABC) system: a Calculate the activity rate for each activity b. Calculate the indirect costs allocated to each product. c Determine the unit product cost for each product. 2. Previously, the company used a traditional costing system that resulted in the following unit product cost for each product: Product A = $38, Product B = $48, Product C = $42.Comparing traditional vs ABC unit product cost that you did on question number 1c above, determine which product(s)was under-costed and over-costed
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