The overhead applied to each unit of Product G1 under activity-based costing is closest to:
A)$780.12 per unit
B)$866.76 per unit
C)$830.79 per unit
D)$380.33 per unit

Question

Quizplus · Accepted Answer

The overhead cost for each activity is calculated as follows:
- Activity 1: $345,000 / 1,500 = $230 per setup
- Activity 2: $375,000 / 12,500 = $30 per machine hour
- Activity 3: $480,000 / 20,000 = $24 per inspection
- Activity 4: $590,000 / 40,000 = $14.75 per order
Total overhead cost per unit of G1 = ($230 + $30 x 6 + $24 + $14.75 x 3) / 1,000 = $0.83 per unit
Therefore, the closest option is C, which is $830.79 per unit. Computation of activity rates: 11ea7998_5ec7_22f7_911b_6166b9e585b8_TB2627_00_TB2627_00 Computation of the overhead cost per unit under activity-based costing. 11ea7998_5ec7_22f8_911b_fb063eee1220_TB2627_00_TB2627_00 Essay

The Overhead Applied to Each Unit of Product G1 Under