Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Addy Company has two products: A and B. The annual production and sales of Product Alis 1.700 units and of Product Bis 1.100 units. The
Addy Company has two products: A and B. The annual production and sales of Product Alis 1.700 units and of Product Bis 1.100 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products Product A requires 0.3 direct labor-hours per unit and Product requires 0.6 direct labor hours per unit. The total estimated overhead for next period is $98,785. The company is considering switching to an activity based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools-Activity 1. Activity 2 and General Factory-with estimated overhead costs and expected activity as follows: Estimated Activity Overhead Expected Activity Cost Pool Costs Product A Product B Total Activity 1 $30,528 1.000 600 1,600 Activity 2 $17,385 1.700 200 1.900 General Factory 550.872 510 660 1.170 Total 598.785 NOTE THE GENERAL FACTORY ACTIVITY.COST POOLS.COSTS ARE ALLOCATED ON THE BASIS OF DIRECELADOR HOURSI NOTE DEPENDING ON ROUNDING, YOUR ANSWERS SHOULD COME TO WITHIN A DOLLAR OF THE CORRECT ANSWER The overhead cost per unit of Product B under the activity based costing system is closest to 55066 $26.09 $3520 53816
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started