XAA is considering different costing options. They are now using a traditional costing procedures which applies overhea

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answerhappygod
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XAA is considering different costing options. They are now using a traditional costing procedures which applies overhea

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XAA is considering different costing options. They are now usinga traditional costing procedures which applies overhead on the basis of machine hours. They have two products, A andB. XAA is considering a shift to activity-based costing and hascreated three cost activity pools . Data on the cost pools andrespective driver are shownbelow.
Pool No 1 Pool No2 Pool No 3
Product Driver: Machine hours Driver:Setups Driver: Parts
A 1200 45 2,250
B 2800 55 750
Pool cost $160,000 $280,000 $360,000
The overhead cost allocated to product A by using traditionalcosting procedures would be:
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