A Company Has Two Products: X and Y Annual Production and Sales Level of Product X Is 161,100

question 52

Essay

A company has two products: X and Y.It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools.
$$\begin{array} {r}{ \text { Budgeted Activity } } \quad\quad\quad\\\begin{array} { | l | l | r | r | } \hline \begin{array} { l } \text { Activity Cost } \\\text { Pool }\end{array} &{ \begin{array} { l } \text { Budgeted } \\\text { Cost }\end{array} } & \text { Product } \mathbf { X } & { \text { Product Y } } \\\hline \text { Activity 1 } & \$ 3,600 & 25,200 & 46,800 \\\hline \text { Activity 2 } & \$ 4,800 & 36,000 & 44,000 \\\hline \text { Activity 3 } & \$ 6,300 & 43,200 & 46,800 \\\hline\end{array}\end{array}$$ Annual production and sales level of Product X is 161,100 units, and the annual production and sales level of Product Y is 275,200 units.
a.Compute the approximate overhead cost per unit of Product X under activity-based costing.
b.Compute the approximate overhead cost per unit of Product Y under activity-based costing.

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