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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.
| Budgeted Activity | |||
| Activity Cost Pool | Budgeted Cost | Product X | Product Y |
| Activity 1 | $3,600 | 25,200 | 46,800 |
| Activity 2 | $4,800 | 36,000 | 44,000 |
| Activity 3 | $6,300 | 43,200 | 46,800 |
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.
Answer
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