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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.
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 Production setups Material handling Packaging costs Cost Driver Number of setups Number of parts Number of units Amount $ 73,000 49,000 246,000 $368,000 M 12 68 96,000 XY 18 23 60,000 What is the total overhead per unit allocated to Product XY using activity-based costing (ABC)? $2.03. o $2.51. (0) $2.36. $2.26
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