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Question: A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools:



Budgeted Activity
Activity Cost Pool Budgeted Cost Product A Product B
Activity 1 $97,000 4,000 3,800
Activity 2 $72,000 5,500 6,500
Activity 3 $113,000 3,500 6,250

Annual production and sales level of Product A is 35,300 units, and the annual production and sales level of Product B is 70,550 units. What is the approximate overhead cost per unit of Product B under activity-based costing?

$3.49

$2.25

$10.28

$12.44

$1.77

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M92579160

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