What is classical approach ?
2 answers:
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Answer:
- A1 = $12 A2 = $9.20 A3 = $1.50
- Total Overhead for Standart Product $267.16
- Total Overhead for Deluxe Product $163.48
Explanation:
First we will Calculate the rates:
This is done by adding the two product activity use to get the total cost driver.
Then we divide by the activity cost to get the rate:
Next we check the overhead per unit:
units/ activity use x rate = overhead for activity
<em>Standart Product Manufacturing Overhead</em>
36,375units /2,500 Use Activity 1 x $12 = $174.60
36,375units /4,500 Use Activity 2 x $9.20 = $74.37
36,375units /3,000 Use Activity 3 x $1.50= $18.19
Total Overhead for Standart Product $267.16
<em>Deluxe Product Manufacturing Overhead</em>
62,240units /5,250 Use Activity 1 x $12 = $83,14
62,240units /5,500 Use Activity 2 x $9.20 = $60,85
62,240units /2,800 Use Activity 3 x $1.50= $19,49
Total Overhead for Deluxe Product $163.48