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Question
A company uses activity-based costing to determine the costs of its three products: A, B and C. The activity rates and activity levels for each of the companys three activity cost pools are shown in the following table:
| Budgeted Activity | ||||
| Activity Cost Pool | Activity Rate | Product A | Product B | Product C |
| Activity 1 | $48 | 3,500 | 1,000 | 500 |
| Activity 2 | $51 | 300 | 2,100 | 600 |
| Activity 3 | $73 | 400 | 200 | 1,400 |
Compute the companys budgeted overhead cost for each of the three products under activity-based costing.
Answer
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