Lake Erie Company uses a plantwide overhead rate with machine
hours as the allocation base. Next year, 790,000 units are expected
to be produced taking 0.75 machine hours each. How much overhead
will be assigned to each unit produced given the following
|Estimated:||Department 1||Department 2|
|Manufacturing overhead costs||$||3,145,500||$||1,577,000|
|Direct labor hours||169,000||DLH||269,000||DLH|
$10.78 per unit
$7.65 per unit
$5.21 per unit
$11.69 per unit
$10.20 per unit
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
|Activity Cost Pool||Budgeted Cost||Product A||Product B|
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 A under activity-based costing?
The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.
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