Chapter 5 Homework Assignment9.ACG2071 Managerial Accounting: FALL2015 CRN 18319 MANAGERIALACCOUNTING ONLINEvalue:4.00 pointsTerry Industries produces two electronic decoders P and Q. Decoder P is more sophisticated and requiresmore programming and testing than does Decoder Q. Because of these product differences the companywants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevantinformation follows.Activity PoolsCost Pool TotalRepair and maintenance on assembly machine$102 000Programming cost98 000Software inspections8 640Product testing9 880Total overhead costCost DriverNumber of units producedNumber of programming hoursNumber of inspectionsNumber of tests$218 520Expected activity for each product follows.Decoder PDecoder QNumberof Units15 00036 000Number ofProgrammingHours1 9002 100Numberof Inspections194126Numberof Tests1 5001 100Total51 0004 0003202 600Required:a. Compute the overhead rate for each activity pool. (Round your answers to 2 decimal places.)b. Determine the overhead cost allocated to each product. (Round intermediate calculations to 2decimal places.)cindy khaninstructions | help success…ReferenceseBook & ResourcesWorksheetLearning Objective: 05-02Identify cost centers andcost drivers in an activitybased costing system.Difficulty: 2 MediumLearning Objective: 05-03Use activity-based costing tocalculate costs of productsand services.Check my work©2015 McGraw-Hill Education. All rights reserved.2015
