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Using activity-based costing, total overhead per unit of Great P model is (rounded to the nearest cent): $42.61. $45.99. $66.73. $61.32.

1 Answer

2 votes

Answer:

$42.61

Step-by-step explanation:

The computation of the total overhead cost of Great P model is as follows:

Activity Overhead allocated to Great P

Engineering and Design ($40,,712 × 1440 ÷ 2409 ) $241,920

Quality control ($269,808 × 7,200 ÷ $12,848 ) $151,200

Machinery ($539,616 × 13,440 ÷ 33,726 ) $215,040

Miscellaneous overhead ($134,904 × 14,400 ÷ 26,400 ) $73584

Total $681,744

Now the overhead per unit is

= Total Overhead allocated ÷ Annual sales in units

= $681,744 ÷ 16,000

= $42.61

hence, the first option is correct

Using activity-based costing, total overhead per unit of Great P model is (rounded-example-1
User Michael Victor
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