Hunter Company Manufactures Two Products (XX and YY) ACompute the Allocation Rates for Each of the Activity Drivers

Essay

Hunter Company manufactures two products (XX and YY). The overhead costs have been divided into four cost pools that use the following activity drivers: $\begin{array}{ccccc}&\text { Number of }&\text { Number of }&\text { Number of Labour } &\text { Labour } \\\text { Product } &\text { Orders }&\text { Setups }&\text { Setups }&\text { Transactions }&\text { Hours }\\ \mathrm{XX} & 60 & 20 & 50 & \text { 2,000 } \\ \text { YY } & 20 & 80 & 70 & 500 \\\\\text { Cost per pool } & £ 16,000 & £ 13,000 & £ 2,400 & £ 20,000 \\\end{array}$
a.Compute the allocation rates for each of the activity drivers listed.
b.Allocate the overhead costs to Products XX and YY using activity-based costing.
c.Compute the overhead rate using labour hours under the traditional functional-based costing system.
d.Allocate the overhead costs to Products XX and YY using the traditional functional-based costing system overhead rate calculated in part (c).