Business, 12.03.2021 20:10 oomale

Adelberg Company has two products: A and B. The annual production and sales of Product A is 2,250 units and of Product B is 1,650 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.5 direct labor-hours per unit and Product B requires 0.8 direct labor-hours per unit. The total estimated overhead for next period is $104,900.The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools--Activity 1, Activity 2, and Order Size--with estimated overhead costs and expected activity as follows:Estimated Expected ActivityActivity Cost Pools Overhead Costs Product A Product B TotalActivity 1 $ 32,414 1,550 1,150 2,700Activity 2 18,462 2,250 750 3,000Order Size 54,024 1,125 1,320 2,445Total $ 104,900(Note: The Order Size activity cost pool's costs are allocated on the basis of direct labor-hours.)The predetermined overhead rate under the traditional costing system is closest to:

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Adelberg Company has two products: A and B. The annual production and sales of Product A is 2,250 un...

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