Question
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.
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 3 7 Material handling Number of parts 43,000 64 16 Packaging costs Number of units 193,000 105,000 45,000 $ 315,000 What is the total overhead per unit allocated to Product XY using activity-based costing (ABC)?
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