Ivory Corporation Manufactures Two Products (A and B) ACompute the Allocation Rates for Each of the Activity Drivers

Essay

Ivory Corporation manufactures two products (A and B).The overhead costs have been divided into four cost pools that use the following activity drivers:
$\begin{array}{ccccc}&\text { Number of } & \text { Number of } &\text { Machine } & \text { Packing }\\ \text { Product } & \text { Setups } & \text { Orders } & \text { Hours } & \text { Orders } \\\text { A } & 20 & 35 & 1,000 & 75 \\ \text { B } & 5 & 70 & 1,500 & 125 \\\\\text { Cost per pool } & \$ 15,000 & \$ 8,400 & \$ 120,000 & \$ 40,000\end{array}$
a.Compute the allocation rates for each of the activity drivers listed.
b.Allocate the overhead costs to Products A and B using activity-based costing.
c.Compute the overhead rate using machine hours under the functional-based costing system.
d.Allocate the overhead costs to Products A and B using the functional-based costing system overhead rate calculated in part (c).