Concept explainers
(1)
Activity-based costing (ABC) method: The costing method which allocates
Formula to compute activity-based overhead rate:
To compute: The activity-based overhead rate for each of the given activities
(2)
To compute: The activity-cost allocated to total and per unit of each of the products.
(3)
To discuss: The reason for the difference in activity-based overhead cost per unit of each of the products, despite the equal consumption of 40 minutes of machine time per unit.
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