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 activities are shown in the following table:activity budgeted cost activity cost driver budgeted activityproduct a product bproduct cactivity 1 $ 80,000square feetactivity 2 $ 55,000units inspectedactivity 3 $ 102,000setups7,0008,0003,50010,000 21,00016,000 9,0002,000 2,625how much overhead will-be assigned to product b using activity-based costing? (do not round intermediate calculations and round the final answer to 2 decimal places.)

Answer 1

To determine the overhead assigned to Product B using activity-based costing, calculate the cost per unit for each activity cost driver and multiply it by the amount consumed by Product B, then sum these costs across all activities. Specific numerical data for Product B is required for an accurate calculation.

Step-by-step explanation:

To calculate the overhead assigned to Product B using activity-based costing (ABC), we need to allocate each activity's budgeted cost to the products based on their respective use of the cost drivers associated with each activity. This involves determining the cost per unit of each cost driver and then multiplying it by the quantity of the cost driver's units consumed by Product B. Unfortunately, the exact numbers needed for calculating these allocations for Product B were not provided in the question. However, the process typically involves the following steps:

• Calculate the cost per unit of each activity's cost driver (activity cost per unit) by dividing the activity's budgeted cost by the total budgeted activity.
• Multiply the activity cost per unit by the amount of the activity's cost driver consumed by Product B.
• Sum the resulting costs across all activities to get the total overhead assigned to Product B.

For example, if Activity 1 had a cost per square foot of $2, and Product B used 1,000 square feet, Product B's overhead for Activity 1 would be $2,000 ($2 x 1,000 square feet).

The final overhead assigned to Product B is the sum of individual overheads from all activities.