Question - A company has two products: standard and deluxe. The company expects to produce 36,375 standard units and 62,240 deluxe units. It uses activity-based costing and has prepared the following analysis showing budgeted cost and cost driver activity for each of its three activity cost pools.
|
Activity Cost Pool
|
Budgeted Cost
|
Budgeted Activity of Cost Driver
|
|
Standard
|
Deluxe
|
|
Activity 1
|
$93,000
|
2,500
|
5,250
|
|
Activity 2
|
$92,000
|
4,500
|
5,500
|
|
Activity 3
|
$87,000
|
3,000
|
2,800
|
Required:
1. Compute overhead rates for each of the three activities.
2. What is the expected overhead cost per unit for the standard units?
3. What is the expected overhead cost per unit for the deluxe units?