Refer to the information in Problem 17-2B. Additional information on overhead cost follows. Data from Problem 17-2B
Question:
Refer to the information in Problem 17-2B. Additional information on overhead cost follows.
Data from Problem 17-2B
Sara's Salsa produces salsa in two types: Extra Fine for restaurants and Family Style for home use. The company budgets $280,000$280,000 of overhead cost and 40,000 direct labor hours. Additional information follows.
Required
1. Compute an activity rate for each activity using activity-based costing.
2. The following actual activity usage produced 12,000 units of Extra Fine and 8,000 units of Family Style. Allocate overhead cost to Extra Fine and to Family Style and compute overhead cost per unit for each product using activity-based costing.
3. Compute product cost per unit for Extra Fine and for Family Style.
4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit).
Step by Step Answer:
To compute an activity rate for each activity using activitybased costing ABC we can follow these steps 1 Compute an activity rate for each activity u...View the full answer
