Question

Duiz Help Daston Company manufactures two products, F. ct F and Product G. The company expects to produce and sell 1,970 units of Product F and 2.700 units of Product G during the current year. Data relating to the company's three activity cost pools are given below for the current year: Activity Cost Pools Machine setups Purchase orders Order size Total Cost $36,570 $281,880 $131,250 Product F 164 setups 1,310 orders 2,310 hours Total Activity Product G 101 setups 1,120 orders 3,940 hours Total 265 setups 2,430 orders 6,250 hours Required: Using the activity-based costing approach, determine the overhead cost per unit for each product. (Round your answers to 2 decimal places.) Overhead Cost Per Unit Product F Product G 1

Answer 1

Answer:

Overhead cost per unit $113.25 $83.93 Product F Product G

Working:

Step 1: Calculate activity rate

Activity cost pools Machine setups Purchase order Order size Total cost (TC) $36,570 $281,880 $131,250 Total activity (TA) 265 2430 6250 Activity Rate (TC/TA) $138.00 $116.00 $21.00

Step 2: Allocate overhead cost:

Product F Activity cost pools Machine setups Purchase order Order size Activity Rate (AR) $138.00 $116.00 $21.00 Total Activity (TA) Product G 164 1310 2310 Total allocated overhead cost = Units produced Overhead cost per unit Allocated cost (AR *TA) Product F Product G 101 $22,632.00 $13,938.00 1120 $151,960.00 $129,920.00 3940 $48,510.00 $82,740.00 $223,102.00 $226,598.00 1,970 2,700 $113.25 $83.93