Overhead Cost Assignment
1) What total overhead cost is allocated/assigned to Product A under activity-based costing?
2) What is the overhead cost per unit of Product A under activity-based costing?
Please explain each step clearly. I would like to know where you got the numbers from and which formula (if any) you used. Thank you!
A company has two products: A and B. 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 A is 12,000 units and the annual production and sales level of Product B is 11,500 units. Budgeted Activity Activity Cost Pool Budgeted Cost $80,000 Product A Product B Product C Activity 1 400 100 500 $60,000 Activity 2 250 500 750 Activity 3 $360,000 2700 300 3000. .