The overhead applied to each unit of Product X0 under activity-based costing is closest to:
A)$119.76 per unit
B)$381.10 per unit
C)$362.21 per unit
D)$459.95 per unit

Question

The overhead applied to each unit of Product X0 under activity-based costing is closest to:
A)$119.76 per unit 
B)$381.10 per unit
C)$362.21 per unit
D)$459.95 per unit

Quizplus · Accepted Answer

To compute the overhead cost per unit, we need to divide the total overhead cost by the total number of units produced.

Total overhead cost under activity-based costing = $7,249,550

Total number of units produced = 20,000 units

Overhead cost per unit = $7,249,550 ÷ 20,000 units = $362.48

Rounding off to two decimal places, the overhead applied to each unit of Product X0 under activity-based costing is closest to $362.21 per unit, which is the closest option to our calculated value. Therefore, the correct answer is C. Computation of activity rates: 11ea7998_5eb5_e489_911b_211d5eafb07f_TB2627_00_TB2627_00 Computation of the overhead cost per unit under activity-based costing. 11ea7998_5eb5_e48a_911b_1d02d669e0b9_TB2627_00_TB2627_00

The Overhead Applied to Each Unit of Product X0 Under