Question
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
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 | $ | 98,000 | 4,100 | 3,900 | |||||
| Activity 2 | $ | 73,000 | 5,600 | 6,600 | |||||
| Activity 3 | $ | 115,000 | 3,600 | 6,350 | |||||
Annual production and sales level of Product A is 35,400 units, and the annual production and sales level of Product B is 70,650 units. What is the approximate overhead cost per unit of Product A under activity-based costing?
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Managerial Accounting for Managers
Authors: Eric Noreen, Peter Brewer, Ray Garrison
2nd edition
978-0077403485, 77403487, 73527130, 978-0073527130
