Question
Assume that a pet fod manufacturer s considering adding two types of pet food to its existing product line. Research had determined that good demand
Assume that a pet fod manufacturer s considering adding two types of pet food to its existing product line. Research had determined that good demand exists for dog food in 40-pound bags and cat food in 1/2 pound cans. The company identified the following partial list of activities, costs, and activity drivers expected for the next year:
Activity Expected Costs Cost Driver
Handling Materials $105,000 Number of batches made
Storage Costs $820,000 Weght of finished product
Dog Food Cat Food
Producton Volume 100,000 units 200,000 units
Batches Made 200 150
Refer to the data above. How much overhead cost will be assigned to each unit of product using activity-based costing (ABC)?
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