Cabanos Company Manufactures Two Products,Product C and Product D

Essay

Cabanos Company manufactures two products,Product C and Product D.The company estimated it would incur $160,790 in manufacturing overhead costs during the current period.Overhead currently is applied to the products on the basis of direct labour hours.Data concerning the current period's operations appear below:
Required:
a)Compute the predetermined overhead rate under the current method,and determine the unit product cost of each product for the current year.
b)The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labour hours.The activity-based costing system would use three activity cost pools.Data relating to these activities for the current period are given below: