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-   -   Activity Cost Pool (https://www.askmehelpdesk.com/showthread.php?t=67482)

  • Feb 28, 2007, 06:50 PM
    tony16
    Activity Cost Pool
    Swagg Jewelry Corporation manufactures custom jewelry. In the past, Swagg has been using a traditional overhead allocation system based solely on direct labor-hours. Sensing that this system was distorting costs and selling prices, Swagg has decided to switch to an activity-based costing system using three activity cost pools. Information on these activity cost pools are as follows:

    (Info will be on different question, size was too big)

    Job #309 incurred $900 of direct material, 30 hours of direct labor at $40 per hour, 80 machine hours, and 5 inspections.

    Required:
    a. What is the cost of the job under the activity-based costing system?
    b. Relative to the activity-based costing system, would Job#309 have been overcosted or undercosted under the traditional system and by how much?

    This is a tough one, any type of help would be appreciated. Thanks!

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