Question
A company has two products: A1 and B2. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each
A company has two products: A1 and B2. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activities:
| Activity | Budgeted Cost | Activity Cost Driver | Budgeted Activity | |
|---|---|---|---|---|
| Product A1 | Product B2 | |||
| Activity 1 | $ 48,000 | Square feet | 1,200 | 4,800 |
| Activity 2 | $ 63,000 | Units repaired | 2,240 | 4,760 |
| Activity 3 | $ 80,000 | Orders | 7,200 | 800 |
Annual production and sales level of Product A1 is 8,480 units, and the annual production and sales level of Product B2 is 22,310 units. What is the approximate overhead cost per unit of Product B2 under activity-based costing?
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Tobacco Industry IRS Audit Techniques Guide
Authors: Internal Revenue Service
1st Edition
1304114910, 978-1304114914
