Question

Daba Company manufactures two products, Product F and Product G. The company expects to produce and sell 3,200 units of Product F and 3,600 units of Product G during the current year. The company uses activity-based costing to compute unit product costs for external reports. Data relating to the company's three activity cost pools are given below for the current year:

	Estimated		Expected Activity
Activity Cost Pool	Overhead Cost		Product F		Product G		Total
Machine setups	$	18,480	132	setups	88	setups	220	setups
Purchase orders	$	124,800	840	orders	1,560	orders	2,400	orders
Order size	$	71,920	1,290	hours	1,190	hours	2,480	hours

Required:

Using the activity-based costing approach, determine the overhead cost per unit for each product. (Round your answers to 2 decimal places.)

Product F:

Product G:

Answer 1

	Product F	Product G
Produce and Sell	3200 Units	3600 Units
Overhead Cost ( Working Note)	92178	123022
OH Cost Per Unit	28.81	34.17
Working Note
	Cost Driver	Product F	Product G	Total
Machine Set up Cost	No of Set Ups	11088.00	7392.00	18480
Purchase Order Cost	NO of Orders	43680.00	81120.00	124800
Order Size	NO of Orders	37410.00	34510.00	71920
	Total Cost	92178	123022	215200
As here, we have used the Cost drivers marked agaisnt the Activities mentioned corroesponding
Here , cost driver is No. of Hours for such Order size cost.