X Company makes two products, A and B, and uses an activity-based costing overhead allocation system,...
X Company makes two products, A and B, and uses an
activity-based costing overhead allocation system, with three cost
pools and three cost drivers. Budgeted costs and driver information
for 2020 were as follows:
| Cost Pool 1 | Cost Pool 2 | Cost Pool 3 | |
| Budgeted costs | $110,000 | $51,000 | $33,000 |
| Cost Drivers | |||
| Product A | 81,400 | 56,700 | 71,000 |
| Product B | 72,700 | 49,700 | 45,300 |
What will the allocation to Product A be? [round overhead rate(s)
to two decimal places].
Homework Answers
Overhead rate = cost / cost drivers
1 = 110000/(81400+72700) = $0.71
2 = 51000 /(56700+49700) = $0.48
3 = 33000 /(71000+45300) = $0.28
Allocation to producr A = 81400*0.71 + 56700*0.48 + 71000*0.28
= $104890
Add Answer to:
X Company makes two products, A and B, and uses an
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