Question

n 1 Ch13-17 Saved Help Says Verma Company has two products that they have been building for several years: standard and deluxe. Verma Company expects to produce 39,575 standard units and 65,440 deluxe units. Verma Company uses activity-based costing and has prepared the following analysis showing budgeted cost and cost driver activity for each of its three activity cost pools. Activity Cost Pool Activity 1 Activity 2 Activity 3 Budgeted Cost $117,800 $124,000 $105,560 Budgeted Activity of Cost Driver Standard Deluxe 2,500 5,250 4,500 5,500 3,000 2,800 Required: 1. Compute overhead rates for each of the three activities. 2. What is the expected overhead cost per unit for the standard units? 3. What is the expected overhead cost per unit for the deluxe units? (Round activity rate and cost per unit answers to 2 decimal places.) Activity Expected Costs Expected Activity Driver Activity Rate 1 $ 117,800 2 124,000 105,560 3 Standard Activity Allocated Cost Activity Rate Activity Driver 1 2 3 < Prey 34 of 36 Next >

Answer 1

solution :- Activity | Expected expected Activity Activity Costs Rate. Drives (b C=%6 $117 800 2500+5250 = 7750 15.2 4500 +5500 - 10,000 $ 124,000 $ 105,560 12.4 3 3000 +2800 - 5800 18.2 Standard units :- Activity Activity Driver Activity Rate Allocated cost axb. 2500 15.2 38,000 2 4500 12.4 18.2 55.800 3 300D 54,600 Total allocated Cost = 148,400 No. of cenits produced = 39,575 Overhead Cost per cenit 148,400 39575 3.75.

③ Deluxe units : Activity Activity Driver Activity Rate Allocated cost 6 axb 5250 79800 68,200 2. 15.2 12.4 18.2 5500 2800 50,960 3 Total allocated cost 198,960 No. of units produced = 65,440 Overhead cost per unit 198960 65,440 = 3.04.