Question:
Lift Jack Company has seven activity cost pools and two products. It expects to produce 200,000 units of its automobile scissors jack and 80,000 units of its truck hydraulic jack. Having identified its activity cost pools and the cost drivers for each cost pool, Lift Jack Company accumulated the following data relative to those activity cost pools and cost drivers. Using the previous data, do the following:
a. Prepare a schedule showing the computations of the activity-based overhead rates per cost driver.
b. Prepare a schedule assigning each activity's overhead cost to the two products.
c. Compute the overhead cost per unit for each product.
d. Comment on the comparative overhead cost per unit.