A company has two products: Big and Little.It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools:
Annual production and sales level of big product is 62,525 units,and the annual production and sales level of little product is 251,900 units.
a.Compute the approximate overhead cost per unit of big product under activity-based costing.
b.Compute the approximate overhead cost per unit of little product under activity-based costing.
Definitions:
Yield To Maturity
The expected total yield on a bond, assuming it is kept until maturity, encompassing all the interest earnings plus the return of the principal.
Forward Rate
The agreed-upon price for a financial transaction to be executed at a future date, used particularly in currency and interest rate markets.
2-year Bond
A debt security that matures in two years and typically offers periodic interest payments.
Stripped Treasuries
Securities derived from U.S. Treasury bonds by separating the coupons from the principal, allowing them to be sold separately as zero-coupon bonds.
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