Question - Foster Company manufactures two products (XX and YY). The overhead costs have been divided into four cost pools that use the following Drivers:
Product Number of orders Number of setups Number of labor transactions Labor hours
XX 60 20 50 2000
YY 20 80 70 500
Cost per pool $16000 $13,000 $2,400 $20,000
Required:
a. Compute the allocation rates for each of the activity drivers listed.
b. What are the total costs assigned to products XX and YY using activity-based costing?
c. Compute the overhead rate using labor hours under the functional-based costing system.
d. What are the total costs assigned to products XX and YY using the functional based costing system overhead rate calculated in part (c).