A company has two products: X and Y.It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools.
$$\begin{array} {r}
{ \text { Budgeted Activity } } \quad\quad\quad\
\begin{array} { | l | l | r | r | }

\hline \begin{array} { l }
\text { Activity Cost } \
\text { Pool }
\end{array} &{ \begin{array} { l }
\text { Budgeted } \
\text { Cost }
\end{array} } & \text { Product } \mathbf { X } & { \text { Product Y } } \
\hline \text { Activity 1 } & \$ 3,600 & 25,200 & 46,800 \
\hline \text { Activity 2 } & \$ 4,800 & 36,000 & 44,000 \
\hline \text { Activity 3 } & \$ 6,300 & 43,200 & 46,800 \
\hline
\end{array}\end{array}$$ Annual production and sales level of Product X is 161,100 units, and the annual production and sales level of Product Y is 275,200 units.
a.Compute the approximate overhead cost per unit of Product X under activity-based costing.
b.Compute the approximate overhead cost per unit of Product Y under activity-based costing.

Question

A company has two products: X and Y.It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools.
 $$\begin{array} {r}
{ \text { Budgeted Activity } } \quad\quad\quad\
\begin{array} { | l | l | r | r | }

\hline \begin{array} { l } 
\text { Activity Cost } \
\text { Pool }
\end{array} &{ \begin{array} { l } 
\text { Budgeted } \
\text { Cost }
\end{array} } & \text { Product } \mathbf { X } &  { \text { Product Y } } \
\hline \text { Activity 1 } & \$ 3,600 & 25,200 & 46,800 \
\hline \text { Activity 2 } & \$ 4,800 & 36,000 & 44,000 \
\hline \text { Activity 3 } & \$ 6,300 & 43,200 & 46,800 \
\hline
\end{array}\end{array}$$ Annual production and sales level of Product X is 161,100 units, and the annual production and sales level of Product Y is 275,200 units.
a.Compute the approximate overhead cost per unit of Product X under activity-based costing.
b.Compute the approximate overhead cost per unit of Product Y under activity-based costing.

Quizplus · Accepted Answer

The Answer of A company has two products: X and Y.It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools.
 $$\begin{array} {r}
{ \text { Budgeted Activity } } \quad\quad\quad\
\begin{array} { | l | l | r | r | }

\hline \begin{array} { l } 
\text { Activity Cost } \
\text { Pool }
\end{array} &{ \begin{array} { l } 
\text { Budgeted } \
\text { Cost }
\end{array} } & \text { Product } \mathbf { X } &  { \text { Product Y } } \
\hline \text { Activity 1 } & \$ 3,600 & 25,200 & 46,800 \
\hline \text { Activity 2 } & \$ 4,800 & 36,000 & 44,000 \
\hline \text { Activity 3 } & \$ 6,300 & 43,200 & 46,800 \
\hline
\end{array}\end{array}$$ Annual production and sales level of Product X is 161,100 units, and the annual production and sales level of Product Y is 275,200 units.
a.Compute the approximate overhead cost per unit of Product X under activity-based costing.
b.Compute the approximate overhead cost per unit of Product Y under activity-based costing.

A Company Has Two Products: X and Y Annual Production and Sales Level of Product X Is 161,100