Question

can someone help with this managerial accounting practice question? i do not understand how to do it

Abbe Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 2,300 units and of Product B is 1,300 units. There are three activity cost pools, with estimated costs and expected activity as follows: Expected Activity Activity Cost Pools Activity 1 Activity 2 Activity 3 Estimated Overhead Cost $ 70,735 $ 94,127 $107,562 Product 1,800 2,800 92e Product B 1,700 1,5ee 900 Total 3,500 4,3ee 1,820 The overhead cost per unit of Product is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Answer: $92.60

Explanation

Calculation of overhead cost per unit of Product B
Activities	Estimated	Total	Total
	Overhead Cost	Expected Activity	Activity Rate
Activity 1	$                70,735.00	3,500.00	$         20.21
Activity 2	$                94,127.00	4,300.00	$         21.89
Activity 3	$              107,562.00	1,820.00	$         59.10
Activities and		Product B
Activity Rates		Expected Activity	Amount
Activity 1 ($20.21)		1,700.00	$   34,357.00
Activity 2 ($21.89)		1,500.00	32,835.00
Activity 3 ($59.10)		900.00	53,190.00
Total overhead costs assigned (a)			$ 120,382.00
Number of units Produced (b)			1,300.00
Overhead cost per unit (a) ÷ (b)			$         92.60