Bark Mode,Incorporated produces and distributes two types of security systems,Standard and Deluxe.Budgeted cost and activity for each of its three activity cost pools are shown below.
The company plans to produce and sell 120,000 standard units and 80,000 deluxe units.
a.Compute the approximate overhead cost per unit of standard under activity-based costing.
b.Compute the approximate overhead cost per unit of deluxe under activity-based costing.
Definitions:
Straight-Line Method
An approach for calculating depreciation of an asset, which spreads the cost evenly over its useful life.
Depreciation
A process for spreading out the expense of a physical asset across its lifespan.
Residual Value
The estimated value that an asset will realize upon its sale at the end of its useful life.
Straight-Line Depreciation
A method of calculating the depreciation of an asset, distributing its cost evenly across its useful life.
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