Answer:
E $4.00
Explanation:
Calculation of the approximate overhead cost per unit of Product B2 under activity-based costing.
Calulation of the Activity 1 allocated to Product B2 line:
$48,000 × 4,800/6,000 = $38,400
Calculation of the Activity 2 allocated to Product B2 line:
$63,000 × 4,760/7,000 = $42,840
Calculation of the Activity 3 allocated to Product B2 line:
$80,000 × 800/8,000 = $8,000
Hence the Total overhead allocated to Product B2 will be :
$38,400+$42,840+$8,000
= $89,240
The Overhead per unit of Product B2 will be :
$89,240/22,310
= $4.00
Therefore the approximate overhead cost per unit of Product B2 under activity-based costing will be $4.00
