I would like to know what the problem means by *Compute the amount of overhead to be allocated to each product under activity-based costing*. Isn't it the amount of overhead already calculate?
(See attached file for full problem description)
The total overhead is given to you, and now this overhead is to be allocated to the products. That is what is meant by -Compute the amount of overhead to be allocated to each product under activity-based costing.
Under Activity Based Costing (ABC) the overhead is allocatd based on the use of activity. The first step is to find the activity rate. The total clost of production setup is 50,000. The total activity is 10 travel clock and 15 for watches - the total ...
The solution explains the overhead allocation using the activity based costing.