Acton Company has two products: A and B. The annual production and sales of Product A is 800 units and of Product B is 500 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labor hours per unit and Product B requires 0.2 direct labor hours per unit. The total estimated overhead for the next period is P92,023. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools - Activity 1, Activity 2, and General Factory - with estimated overhead costs and expected activity as follows:
Activity Cost Pool
Estimated Overhead Cost
Expected Activity - Product A
Expected Activity - Product B
Total
Activity 1
P14,487
500
600
1100
Activity 2
P64,800
2500
500
3000
General Factory
P12,736
400
100
340
Total
P92,023
(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor hours.)