Answer: $3 per unit
Explanation:
Here's the complete question:
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: Activity Cost Pool Budgeted Activity
Budgeted Cost. Product A Product B
Activity 1 $ 87,000. 3,000. 2,800
Activity 2 $ 62,000 4,500 5,500
Activity 3 $ 93,000 2,500 5,250
Annual production and sales level of Product A is 34,300 units, and the annual production and sales level of Product B is 69,550 units. What is the approximate overhead cost per unit of Product A under activity-based costing?
Activity 1 (87000/5800 × 3000) = 45000
Activity 2 (62000/10000 × 4500) = 27900
Activity 3 (93000/7750 × 2500) = 30000
Total overhead cost = 102900
Since Unit = 34300, the overhead cost per unit will then be:
= $102900 / 34300
= $3 per unit
