Problem 3. Abraham Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 200 units and of Product B is 1,000 units. There are three activity cost pools, with total costs and activity as follows: 000,a 000 Activity Cost Pool Activity 1................ Activity 2.......... Activity 3..... 02 Total Cost $10,485 $35,264 $26,395 Product A 300 1,600 60 Total Activity Product B 200 300 400 Total 500 1,900 460 a) What is the total overhead cost allocated to Product B under activity-based costing? b) What is the overhead cost per unit of Product B under activity-based costing?

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Problem 3. Abraham Company uses activity-based costing. The company has two
products: A and B. The annual production and sales of Product A is 200 units and of
Product B is 1,000 units. There are three activity cost pools, with total costs and activity
as follows:
000 à
000 Activity Cost Pool
Activity 1
Activity 2
Activity 3
Total Cost
$10,485
$35,264
$26,395
Product A
300
1,600
60
Total Activity
Product B
200
300
400
Total
500
1,900
460
a) What is the total overhead cost allocated to Product B under activity-based
costing?
b) What is the overhead cost per unit of Product B under activity-based costing?
Transcribed Image Text:Problem 3. Abraham Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 200 units and of Product B is 1,000 units. There are three activity cost pools, with total costs and activity as follows: 000 à 000 Activity Cost Pool Activity 1 Activity 2 Activity 3 Total Cost $10,485 $35,264 $26,395 Product A 300 1,600 60 Total Activity Product B 200 300 400 Total 500 1,900 460 a) What is the total overhead cost allocated to Product B under activity-based costing? b) What is the overhead cost per unit of Product B under activity-based costing?
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