The manufacturing division of an electronics company uses activity-based costi

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    The manufacturing division of an electronics company uses activity-based costing. The
    company has identified three activities and the related cost drivers for indirect production
    costs.
    Activity Cost Driver
    Activity 1 Direct materials cost
    Activity 2 Direct labor cost
    Activity 3 Kilowatt hours
    Three types of products are produced. Direct costs and cost-driver activity for each
    product for a month are as follows:
    Product A Product B Product C
    Direct materials cost $75000 $50000 $125000
    Direct labor cost $6000 $1000 $3000
    Direct labor hours 1000 500 1500
    Kilowatt hours 150000 200000 150000
    Indirect production costs for the month are as follows:
    Activity 1 $12000
    Activity 2 20000
    Activity 3 16000
    Total $48000
    A) Compute the indirect production costs allocated to each product using the ABC system.
    B) Compute the indirect production costs allocated to each product using a traditional
    costing system. Assume indirect production costs are allocated to each product using the
    cost driver: direct labor hours.

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