Question description

Bones Company manufactures two products (X and Z).
Overhead costs have been divided into three cost pools that use the following activity drivers.

Product

# of Setups

Machine Hours

Packing Orders

X

20

1,000

50

Z

20

3,000

150

Cost per Pool

 $40,000 

 $75,000 

 $25,000 

a. What is the allocation rate for Product Z per setup using activity-based costing?

b. What is the allocation rate for Product Z per machine hours using activity-based costing?

c. What is the allocation rate for Product Z per packing order using activity-based costing?

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