A company has two products: A and B. It uses activity-based - 14675

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yousafbhutta

yousafbhutta

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A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools.

    Budgeted Activity
  Activity Cost Pool Budgeted Cost Product A Product B
  Activity 1 $79,200     2,500     2,300    
  Activity 2 $69,300     4,000     5,000    
  Activity 3 $91,800     2,000     4,800    


Annual production and sales level of Product A is 33,800 units, and the annual production and sales level of Product B is 69,100 units. What is the approximate overhead cost per unit of Product A under activity-based costing?
$11.67
$7.70
$16.50
 $13.50
$2.93

Solution Description

 

A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools.

 

 

Budgeted Activity

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