Question
XYZ company has identified 3 primary activities taking place in its business: A, B, and C. Activity A has $100,000 of pooled costs. Activities B
XYZ company has identified 3 primary activities taking place in its business: A, B, and C. Activity A has $100,000 of pooled costs. Activities B and C have $200,000 and $300,000 of pooled costs, respectfully. The driver for activity A equals 20,000 total direct labor hours. The denominator for activity B is 50,000 machine hours. The allocation base for activity C is 150 setups. XYZ manufactures two products: 1 and 2. 50,000 units of Product 1 were produced. Product 1 required: 10,000 direct labor hours, 30,000 machine hours, and 40 setups. The indirect cost per unit of Product 1 equals:
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