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problem: The firm is considering using an activity based costing system to find out unit product costs for external financial reports instead of its traditional system based on direct labor hours. The activity based costing system would use three activity cost pools. Information relating to these activities for the current period are given below:

Activity

Estimated Overhead

Expected Activity

 

 

Cost Pool

Costs

Product C

Product D

Total

Machine setups

$13,630

130

160

290

Purchase orders

85,750

750

1,000

1,750

General factory

67,760

4,000

2,160

6,160

 

$167,140

 

 

 

find out the unit product cost of each product for the current period using the activity based costing approach.

 

Cost Accounting, Accounting

  • Category:- Cost Accounting
  • Reference No.:- M921787

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