The overhead applied to each unit of Product X2 under activity-based costing is closest to:
A)$2,082.89 per unit
B)$2,186.02 per unit
C)$2,964.58 per unit
D)$1,837.85 per unit

Question

Quizplus · Accepted Answer

Computation of activity rates: 11ea7998_5eb7_e064_911b_4f5eacf43707_TB2627_00_TB2627_00 Computation of the overhead cost per unit under activity-based costing. 11ea7998_5eb8_0775_911b_3b1d9aa11336_TB2627_00_TB2627_00 Reference: CH04-Ref23
Adelberg Company has two products: A and B.The annual production and sales of Product A is 500 units and of Product B is 1,000 units.The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products.Product A requires 0.4 direct labor-hours per unit and Product B requires 0.2 direct labor-hours per unit.The total estimated overhead for next period is $68,756.
The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports.The new activity-based costing system would have three overhead activity cost pools--Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows: 11ea7998_5eb8_0776_911b_4b0edd004080_TB2627_00_TB2627_00 (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.)

The Overhead Applied to Each Unit of Product X2 Under