A Company Uses Activity-Based Costing to Determine the Costs of Its

question 32

Essay

A company uses activity-based costing to determine the costs of its three products: A, B and C.The activity rates and activity levels for each of the company's three activity cost pools are shown in the following table:
$\begin{array}{r}{\text { Budgeted Activity }} \quad \quad \quad \quad \quad \quad \\\begin{array}{|l|r|r|r|r|}\hline \begin{array}{l}\text { Activity Cost } \\\text { Pool }\end{array} & \text { Activity Rate } & \text { Product A } & \text { Product B } & \text { Product C } \\\hline \text { Activity 1 } & \$ 48 & 3,500 & 1,000 & 500 \\\hline \text { Activity 2 } & \$ 51 & 300 & 2,100 & 600 \\\hline \text { Activity 3 } & \$ 73 & 400 & 200 & 1,400\\\hline\end{array}\end{array}$ Compute the company's budgeted overhead cost for each of the three products under activity-based costing.

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Definitions:

Refrigerator

An electrical appliance used to keep food and drinks cold, preserving their freshness over a longer period.

Medical Record

A comprehensive document containing the history, diagnosis, treatment, and outcome of a patient's healthcare management.

Examination Room

A room in a healthcare facility where medical examinations, procedures, or consultations take place.

Temperature Setting

The act of adjusting or regulating the degree of heat or cold of a space or device to a desired level.