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.

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.

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.

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