alliance company manufactures two products brushes and combs the overhead costs 496051

Alliance Company manufactures two products (brushes and combs). The overhead costs have been divided into four cost pools that use the following activity drivers.

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# of Setups

# of Orders

Machine Hours

Packing Orders

Brushes

30

35

2,000

100

Combs

10

65

6,000

150

Cost per Pool

$20,000

$10,000

$280,000

$60,000

Required

  1. Compute the allocation rates for each of the activity drivers listed.
  2. Allocate the overhead costs to Products S and T using activity-based costing.
  3. Compute the overhead rate using machine hours under the functional-based costing system.
  4. Allocate the overhead costs to Products S and T using the functional-based costing system overhead rate calculated in part (c).
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