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Tara is thinking of implementing an ABC Method using the following Cost Pools and Cost...

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Accounting

Tara is thinking of implementing an ABC Method using the following Cost Pools and Cost Drivers:
Cost Pools Amount Cost Drivers Amount
Machine Set-Up $550,000 # set-ups 25,000
Quality Inspect $350,000 # inspect 100,000
Purchase Orders $150,000 # of PO 50,000
Machine Costs $450,000 # hours 10,000
Product A had the following data:
# of machine set-ups 15,000
# inspections 60,000
Purchase Orders 40,000
Machine Hours 7,000
Product B had the following data:
# of Machine Set-ups 10,000
# Inspections 40,000
# Purchase Orders 10,000
# Machine Hours 3,000
b. What would be the amount of Manufacturing Overhead charged to Product A and Product B if Tara implements Activity Based Costing (ABC)?
c. How much would Product A be Over or undercharged for Manufacturing Overhead if Tara implements the ABC method instead of using the Plantwide Rate?
d. How much would Product B be under or overcharged for Manufacturing Overhead if Tara implements the ABC method instead of using a plantwide rate?

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