Job Costing Activity based costing
Currambine Pty Ltd manufactures two products, Product C and Product D. In the current year Currambine produced 4,000 units of Product C and 2,000 units of Product D. The Company uses normal costing and activity-based costing (ABC) to allocate overheads. The following are the budgeted activity rates calculated for its three (3) activities:
Actual data relating to these activities for the current period are given below:
1. Calculate the unit manufacturing overhead cost for each product.
2. a. Classify each of the activity according to the cost hierarchy level; and
b. specify a possible allocation base/ cost driver.
3. Calculate for each activity and in total:
a. The amount of overheads over or underallocated,
b. specifying clearly whether the amount is over or under allocated