A company has two products: A and B. It uses activity-based costing and has prepared the...

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Accounting

A company has two products: A and B. It uses activity-basedcosting and has prepared the following analysis showing budgetedcost and activity for each of its three acivity cot pools.
Cost Pool Budgeted Cost Product A Product B
Activity 1
$87,000 3,000 2,800
Activity 2 $62,000 4,500 5,500
Activity 3 $93,000 2,500 5,250
Annual Production and sales level of Product A is, 34,300 units,and the annual production and sales level of Product B is 69,550Units. What is the approximate overhead cost per unit of Product Aunder activity based costing?

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3.8 Ratings (640 Votes)

Total of Activity 1 for product A and B 3000 2800 5800 So unit cost of Activity 1 Total cost Total quantity 87000 5800 15 per activity 1 So cost of Activity 1 See Answer

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A company has two products: A and B. It uses activity-basedcosting and has prepared the following analysis showing budgetedcost and activity for each of its three acivity cot pools.Cost PoolBudgeted CostProduct AProduct BActivity 1$87,0003,0002,800Activity 2$62,0004,5005,500Activity 3$93,0002,5005,250Annual Production and sales level of Product A is, 34,300 units,and the annual production and sales level of Product B is 69,550Units. What is the approximate overhead cost per unit of Product Aunder activity based costing?

Cost Pool	Budgeted Cost	Product A	Product B
Activity 1	$87,000	3,000	2,800
Activity 2	$62,000	4,500	5,500
Activity 3	$93,000	2,500	5,250