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Question
Bark Mode, Incorporated produces and distributes two types of security systems, Standard and Deluxe. Budgeted cost and activity for each of its three activity cost pools are shown below.
The company plans to produce and sell 120,000 standard units and 80,000 deluxe units.
| Budgeted Activity | |||
| Activity Cost Pool | Budgeted Cost | Standard | Deluxe |
| Packaging | $100,000 | 120,000 finished units | 80,000 finished units |
| Material handling | $49,600 | 600,000 total parts | 640,000 total parts |
| Production setups | $120,000 | 6 total setups | 14 total setups |
a. Compute the approximate overhead cost per unit of standard under activity-based costing.
b. Compute the approximate overhead cost per unit of deluxe under activity-based costing.
Answer
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