A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools: 95,000 70,000 109,000.
Budgeted Activity
Activity Cost Budgeted Product A Product B
Pool Cost
Activity 1 $95,000 3,800 3,600
Activity 2 $70,000 5,300 6,300
Activity 3 $109,000 3,300 6,050
Annual production and sales level of Product A is 35,100 units, and the annual production and sales level of Product B is 70,350 units. What is the approximate overhead cost per unit of Product B under activity-based costing?
a. $3.40
b. $2.20
c. $10.28
d. $12.84
e. $1.87
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Home » Business » A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools: 95,000 70,000 109,000.