Question

A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table:______.

Budgeted Activity
Activity Cost Pool Budgeted Cost Product A Product B Product C
Activity 1 $ 76,000​ 6600​ 9600​ 20,600​
Activity 2 $ 51,000​ 7600​ 15,600​ 8600​
Activity 3 $ 94,000​ 3100​ 1600​ 2225​
How much overhead will be assigned to Product B using activity-based costing?
a. $66,563.37
b. $221,000.00
c. $67,098.29
d. $86,538.10
e. $76,000.00

Answer 1

option C. To find the overhead assigned to Product B using activity-based costing, the cost per unit of activity is calculated for each of the three activities and then multiplied by the activity units consumed by Product B. The sum of these products gives the total overhead, which is $67,098.29.

Step-by-step explanation:

The question asks how much overhead will be assigned to Product B using activity-based costing (ABC). To calculate this, we need to divide each activity's budgeted cost by the total activity usage across all products to find the cost per unit of activity. Then, multiply the cost per unit of activity by the number of units each product consumes. The sum for all activities for Product B will give us the total overhead cost assigned to it.

Total Overhead for Product B = (
($2.2742 per unit * 9600 units for Activity 1)+
($1.5310 per unit * 15600 units for Activity 2) +
($13.5692 per unit * 1600 units for Activity 3))

So, after calculations, the overhead assigned to Product B is $67,098.29, which corresponds to Option C.

Answer 2

Answer:
Activity 1 $ 4.726
Activity 2 $ 3.600
Activity 3 $ 5.291
Step-by-step explanation:

The goal would be to add each activity to get the total, and then calcualte the rate:

A 140,000/29,625
B 90,000/25,000
C 82,000/15,500