Estimated overhead costs and expected activity


Addison Company produces two products: A and B. Annual production and sales is 1,000 units of Product A and 500 units of Product B. The company uses activity- based costing to determine product costs. The estimated overhead costs and expected activity for each of the company's three overhead activity centers are as follows:

Expected Cost Driver Activity
Activity Center Estimated Overhead Costs Total Product A Product B
Activity 1 $20,272 800 500 300
Activity 2 29,380 1,300 800 500
General Factory 21,634 380 200 180
Total $71,286

What amount of the cost for Activity 2 will be allocated to Product A under the activity-based costing system?

a) $14,690

b) $15,669

c) $19,587

d) $18,080

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Accounting Basics: Estimated overhead costs and expected activity
Reference No:- TGS056379

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