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Angora, Inc. uses activity-based costing to cost its two products: Standard and Deluxe. The company ...

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Angora, Inc. uses activity-based costing to cost its two products: Standard and Deluxe. The company ...

Angora, Inc. uses activity-based costing to cost its two products: Standard and Deluxe. The company has provided the following data relating to its activities:

Cost Pools

Estimated Cost

Machine (machine-hours)	$144,000
Cutting (number of cuts)	536,000
Sales (number of orders)	108,000

Estimated Activity

Standard

Deluxe

Machine hours	1,000	7,000
Number of cuts	3,000	5,000
Number of orders	7,000	2,000

Required:

a.	What is the activity rate for the cutting cost pool?

b.	If actual activity is the same as that estimated, what is the total amount of overhead

cost
allocated to the Standard product?

Textbook

Managerial Accounting

Edition: 4^th

Author: Davis

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