Asked by Eliani Acosta on May 08, 2024
Verified
Daston Company manufactures two products, Product F and Product G. The company expects to produce and sell 1,750 units of Product F and 1,950 units of Product G during the current year. Data relating to the company's three activity cost pools are given below for the current year:
Required:Using the activity-based costing approach, determine the overhead cost per unit for each product. (Round your answers to 2 decimal places.)
Activity-Based Costing
A pricing technique that allocates expenses to goods or services according to the tasks and materials involved in their creation.
Activity Cost Pools
A costing method that groups all the costs associated with a specific activity, allowing more accurate allocation of costs to products or services.
- Interpret the fundamental concepts of Activity-Based Costing (ABC).
- Compute activity costs per rate for multiple cost pools within an Activity-Based Costing system.
- Apportion indirect financial costs to products using computed activity rates.
Verified Answer
![The activity rates for each activity cost pool are computed as follows: The overhead cost charged to Product F is: The overhead cost charged to Product G is: Overhead cost per unit: Product F: ${{[a(33)]:#,###}} ÷ {{[a(1)]:#,###}} units = ${{[a(44)]:#,###.00}} per unit (rounded)Product G: ${{[a(43)]:#,###}} ÷ {{[a(2)]:#,###}} units = ${{[a(45)]:#,###.00}} per unit (rounded)](https://d2lvgg3v3hfg70.cloudfront.net/TB8314/11eb6b8f_61a9_915b_bf83_c3772bed3ebf_TB8314_00.jpg)
The overhead cost charged to Product F is:![The activity rates for each activity cost pool are computed as follows: The overhead cost charged to Product F is: The overhead cost charged to Product G is: Overhead cost per unit: Product F: ${{[a(33)]:#,###}} ÷ {{[a(1)]:#,###}} units = ${{[a(44)]:#,###.00}} per unit (rounded)Product G: ${{[a(43)]:#,###}} ÷ {{[a(2)]:#,###}} units = ${{[a(45)]:#,###.00}} per unit (rounded)](https://d2lvgg3v3hfg70.cloudfront.net/TB8314/11eb6b8f_61a9_915c_bf83_a9a777fe9d20_TB8314_00.jpg)
The overhead cost charged to Product G is:![The activity rates for each activity cost pool are computed as follows: The overhead cost charged to Product F is: The overhead cost charged to Product G is: Overhead cost per unit: Product F: ${{[a(33)]:#,###}} ÷ {{[a(1)]:#,###}} units = ${{[a(44)]:#,###.00}} per unit (rounded)Product G: ${{[a(43)]:#,###}} ÷ {{[a(2)]:#,###}} units = ${{[a(45)]:#,###.00}} per unit (rounded)](https://d2lvgg3v3hfg70.cloudfront.net/TB8314/11eb6b8f_61a9_915d_bf83_77de6ad260a1_TB8314_00.jpg)
Overhead cost per unit:Product F: ${{[a(33)]:#,###}} ÷ {{[a(1)]:#,###}} units = ${{[a(44)]:#,###.00}} per unit (rounded)Product G: ${{[a(43)]:#,###}} ÷ {{[a(2)]:#,###}} units = ${{[a(45)]:#,###.00}} per unit (rounded)
Learning Objectives
- Interpret the fundamental concepts of Activity-Based Costing (ABC).
- Compute activity costs per rate for multiple cost pools within an Activity-Based Costing system.
- Apportion indirect financial costs to products using computed activity rates.
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