A company has two products: X and Y. It uses activity- based costing and has prepared the following analysis in the table showing budgeted cost and activity for each of its three activity cost pools. Activity cost pool Budgeted cost Product X Product Y Activity 1 $120,000 4000 5000 Activity 2 $95,000 6000 4000 Activity 3 $80,000 2000 3000 Annual production and sales level of Product X is 50,000 units, and the annual production and sales level of Product Y is 30,000 units. What is the approximate overhead cost per unit of Product X under activity-based costing?

A company has two products: X and Y. It uses activity- based costing and has prepared the following analysis in the table showing budgeted cost and activity for each of its three activity cost pools. Activity cost pool Budgeted cost Product X Product Y Activity 1 $120,000 4000 5000 Activity 2 $95,000 6000 4000 Activity 3 $80,000 2000 3000 Annual production and sales level of Product X is 50,000 units, and the annual production and sales level of Product Y is 30,000 units. What is the approximate overhead cost per unit of Product X under activity-based costing?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 14E: Sanford, Inc., has developed value-added standards for four activities: purchasing parts, receiving...

See similar textbooks

Similar questions

Sanford, Inc., has developed value-added standards for four activities: purchasing parts, receiving parts, moving parts, and setting up equipment. The activities, the activity drivers, the standard and actual quantities, and the price standards for 20x1 are as follows: The actual prices paid per unit of each activity driver were equal to the standard prices. Required: 1. Prepare a cost report that lists the value-added, non-value-added, and actual costs for each activity. 2. Which activities are non-value-added? Explain why. Also, explain why value-added activities can have non-value-added costs.
Cicleta Manufacturing has four activities: receiving materials, assembly, expediting products, and storing goods. Receiving and assembly are necessary activities; expediting and storing goods are unnecessary. The following data pertain to the four activities for the year ending 20x1 (actual price per unit of the activity driver is assumed to be equal to the standard price): Required: 1. Prepare a cost report for the year ending 20x1 that shows value-added costs, non-value-added costs, and total costs for each activity. 2. Explain why expediting products and storing goods are non-value-added activities. 3. What if receiving cost is a step-fixed cost with each step being 1,500 orders whereas assembly cost is a variable cost? What is the implication for reducing the cost of waste for each activity?
Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: a. Determine the activity rate for each activity. b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round to the nearest cent.
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 pools: Activity Cost Pool Budgeted Activity Product A Product B Activity 1 Budgeted Cost $ 99,000 $ 74,000 4,200 4,000 Activity 2 5,700 6,700 Activity 3 $117,000 3,700 6,450 Annual production and sales level of Product A is 35,500 units, and the annual production and sales level of Product B is 70,750 units. What is the approximate overhead cost per unit of Product B under activity-based costing? Multiple Choice $3.59 $2.30
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 pools: Budgeted Activity Product A Product B Activity Cost Pool Activity 1 Activity 2 Activity 3 Budgeted Cost $106,000 4,900 4,700 $ 81,000 6,400 7,400 $131,000 4,400 7,150 Annual production and sales level of Product A is 36,200 units, and the annual production and sales level of Product B is 71,450 units. What is the approximate overhead cost per unit of Product A under activity-based costing? Multiple Choice $1.41 O $3.91 $11.04 $2.47
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 Budgeted Cost Product A $70,000 $45,000 $82,000 Activity Cost Pool Activity 1 Activity 2 Activity 3 How much overhead will be assigned to Product B using activity-based costing? Product B 9,000 15,000 1,000 6,000 7,000 2,500 Product C 20,000 8,000 1,625
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 Budgeted Cost Activity Cost Driver Product A Product B Product C $ 70,000 $ 45,000 $ 82,000 Square feet Units inspected Activity 1 6,000 9,000 20,000 Activity 2 Activity 3 7,000 15,000 8,000 Setups 2,500 1,000 1,625 What are the activity rates for the three activities under activity-based costing? Multiple Choice (1) $2.00 per square foot; (2) $3.00 per unit; (3) $3.50 per setup. (1) $3.50 per square foot; (2) $1.50 per unit; (3) $32,80 per setup. (1) $3.50 per square foot; (2) $3.00 per unit; (3) $16.00 per setup. (1) $2.00 per square foot: (2) $1.50 per unit; (3) $16.00 per setup.
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 PoolBudgeted Cost Product AProduct BProduct Activity 1 7,500 10,500 21,500 Activity 2 8,500 16,500 9,500 Activity 3 4,000 2,500 3,125 How much overhead will be assigned to Product B using activity-based costing? 85,000 60,000 112,000
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 pools: Activity Cost Pool Activity 1 3,000 2,800 Activity 2 4,500 5,500 Activity 3 2,500 5,250 Annual production and sales level of Product A is 34,300 units, and the annual production and sales level of Product B is 69,550 units. What is the approximate overhead cost per unit of Product B under activity-based costing? O $10.28 O $3.00 $2.33 $2.00 O $15.00 Budgeted Activity Budgeted Cost $87,000 $62,000 $93,000 Product A Product B
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: Activity Cost Pool Budgeted Cost $70,000 $45,000 $82,000 Product A Budgeted Activity Product B 9,000 15,000 1,000 Product C Activity 1 6,000 Activity 2 7,000 Activity 3 2,500 Which of the following statements is true regarding this company's activity rates? 20,000 8,000 1,625 Seleccione una: O The activity rate under the activity-based costing system for Activity 2 is $1.50. O The activity rate under the activity-based costing system for Activity 2 is $19.50. O The activity rate under the activity-based costing system for Activity 2 is $2.00. O The activity rate under the activity-based costing system for Activity 2 is $16.00. O The activity rate under the activity-based costing system for Activity 2 is $2.81.
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 $ 87,000 7,700 10,700 21,700 Activity 2 $ 62,000 8,700 16,700 9,700 Activity 3 $ 116,000 4,200 2,700 3,325 How much overhead will be assigned to Product B using activity-based costing?
correct option is ?