Question

A company uses activity-based costing to determine the costs of its three products: a, b, and

Answer 1

Answer:

$3.10 ; $2.10 and $14.20

Explanation:

The computation of the activity rates is shown below:

For Activity 1

= Budgeted cost ÷ Total budgeted activity of cost driver

= $94,550 ÷ (18,200 + 8,100 + 4,200)

= $94,550 ÷ 30,500

= $3.10

For Activity 2

= Budgeted cost ÷ Total budgeted activity of cost driver

= $53,550 ÷ (7,100 + 13,200 + 5,200)

= $53,550 ÷ 25,500

= $2.10

For Activity 3

= Budgeted cost ÷ Total budgeted activity of cost driver

= $59,995 ÷ (1,175 + 1,000 + 2,050)

= $59,995 ÷ 4,225

= $14.20