Allure Company manufactures and distributes two products, M and XY. Overhead costs are currently allocated using the
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Allure Company manufactures and distributes two products, M and XY. Overhead costs are currently allocated using the number of units produced as the allocation base. The controller has recommended changing to an activity-based costing (ABC) system. She has collected the following information:
Activity | Cost Driver | Amount | M | XY | ||||
Production setups | Number of setups | $ | 79,000 | 16 | 24 | |||
Material handling | Number of parts | 58,000 | 64 | 16 | ||||
Packaging costs | Number of units | 300,500 | 105,000 | 70,000 | ||||
$ | 437,500 | |||||||
What is the total overhead per unit allocated to Product XY using activity-based costing (ABC)?
Multiple Choice
A) $2.50.
B) $2.46.
C) $2.56.
D) $1.96.
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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