Assignment

Gigabytes Computers, Inc. manufactures two styles of computer keyboards, the Multimedia
Keyboard and the Comfort Type Keyboard The company uses activity based costing to allocate
overhead costs to its products. The following activity centers have been identified:

Activity center Cost driver Allocation rate

Material handling Cost of materials 5% of materials cost
Machine set-up No. of setups P320 per setup
Assembly No. of keyboards P 24 per keyboard
Inspection No. of keyboards P 10 per keyboard
Packaging and shipping No. of orders P 20 per oder

Multimedia keyboards Comfort type keyboards

No. of keyboards 400 700
No. of setups 45 25
No. of orders 9 16
Materials cost P 12,000 P 15,400

Required:
1. Compute the total overhead costs assigned to each type of keyboard.
2. Compute the overhead costs per keyboard assigned to each type of keyboard.