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A company has two products: standard and deluxe. The company expects to produce 39,375 standard units and 65,240 deluxe units. It uses activity-based costing
A company has two products: standard and deluxe. The company expects to produce 39,375 standard units and 65,240 deluxe units. It uses activity-based costing and has prepared the following analysis showing budgeted cost and cost driver activity for each of its three activity cost pools. Budgeted Activity of Cost Driver Activity Cost Pool Budgeted Cost Standard Deluxe Activity 1 $116,250 2,500 5,250 Activity 2 Activity 3 $122,000 4,500 5,500 $104,400 3,000 2,800 Required: 1. Compute overhead rates for each of the three activities. 2. What is the expected overhead cost per unit for the standard units? 3. What is the expected overhead cost per unit for the deluxe units? (Round activity rate and cost per unit answers to 2 decimal places.)
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