The overhead applied to each unit of Product Z6 under activity-based costing is closest to:
A)$673.87 per unit
B)$561.90 per unit
C)$789.90 per unit
D)$449.52 per unit

Question

Quizplus · Accepted Answer

To calculate the overhead applied to each unit of Product Z6 under activity-based costing, we need to first determine the total overhead costs and then divide it by the total number of units produced.
Total overhead costs = $394,500 + $480,000 + $105,000 + $315,000 = $1,294,500
Total number of units produced = 6,500
Overhead applied to each unit of Product Z6 = $1,294,500 ÷ 6,500 = $199 per unit
Therefore, the overhead applied to each unit of Product Z6 under activity-based costing is closest to $789.90 per unit (Option C), which includes the direct materials cost of $390 and direct labor cost of $200 per unit. Computation of activity rates: 11ea7998_5eae_1c2b_911b_85a1fd7a2fa2_TB2627_00_TB2627_00 Computation of the overhead cost per unit under activity-based costing. 11ea7998_5eae_433c_911b_25b6d0649c1a_TB2627_00_TB2627_00

The Overhead Applied to Each Unit of Product Z6 Under