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XYZ Company manufactures and distributes two products, M and XY. Overhead costs are currently allocated using the number of units produced as the allocation base. The controller has recommended changing to an activity-based costing (ABC) system. She has collected the following information:   Activity Cost Driver Amount M XY   Production setups Number of setups $ 82,000   8   12   Material handling Number of parts   48,000   56   24   Packaging costs Number of units   130,000   50,000   80,000       $ 260,000             What is the total overhead per unit allocated to Product M using activity-based costing (ABC)? Select one: a. none of the given answer. b. $2.33. c. $1.79. d. $1.83. e. $2.27.

XYZ Company manufactures and distributes two products, M and XY. Overhead costs are currently allocated using the number of units produced as the allocation base. The controller has recommended changing to an activity-based costing (ABC) system. She has collected the following information:   Activity Cost Driver Amount M XY   Production setups Number of setups $ 82,000   8   12   Material handling Number of parts   48,000   56   24   Packaging costs Number of units   130,000   50,000   80,000       $ 260,000             What is the total overhead per unit allocated to Product M using activity-based costing (ABC)? Select one: a. none of the given answer. b. $2.33. c. $1.79. d. $1.83. e. $2.27.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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XYZ Company manufactures and distributes two products, M and XY. Overhead costs are currently allocated using the number of units produced as the allocation base. The controller has recommended changing to an activity-based costing (ABC) system. She has collected the following information:

 

Activity

Cost Driver

Amount

M

XY

 

Production setups

Number of setups

$

82,000

 

8

 

12

 

Material handling

Number of parts

 

48,000

 

56

 

24

 

Packaging costs

Number of units

 

130,000

 

50,000

 

80,000

 

 

 

$

260,000

 

 

 

 

 

 

What is the total overhead per unit allocated to Product M using activity-based costing (ABC)?

Select one:
a. none of the given answer.
b. $2.33.
c. $1.79.
d. $1.83.
e. $2.27.

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