BM1915

NAME: DATE: SCORE:

ACTIVITY
The management of ABC Manufacturing Company has identified activity centers to which overhead costs are
assigned. The following data are available:

Estimated Overhead Estimated No. of Cost Driver

Activity Centers
Costs Units
Utilities P600,000 80,000 machine hours
Scheduling and Setup 560,000 800 setups
Materials Handling 1,100,000 2,000,000 pounds of materials

The company’s products and other operating statistics are as follows:

Product A Product B Product C

Prime costs P180,000 P200,000 P240,000
Machine hours 60,000 35,000 50,000
Number of setups 225 540 460
Pounds of materials 800,000 500,000 700,000
Number of units
80,000 55,000 60,000
produced
Direct labor hours 52,000 40,000 70,000

Required:
A. Compute for the activity-based overhead rate for each activity center.
B. Compute for the overhead costs allocated to products A, B, and C of ABC Manufacturing Company

A. Activity-based overhead rates

Activity Centers Computation Activity-Based Overhead

Rate
Utilities

Scheduling and Setup

Material Handling

03 Activity 1 *Property of STI

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 BM1915

B. Overhead costs allocated to each product

Product A Product B Product C TOTAL

Utilities:

Scheduling and Setup:

Material Handling:

TOTAL

03 Activity 1 *Property of STI

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