Bark Mode,Incorporated Produces and Distributes Two Types of Security Systems,Standard

question 61

Essay

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.

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Definitions:

Incidental Beneficiary

An incidental beneficiary is a third party who may benefit from a contract between two other parties, even though the benefits were not directly intended for them.

Privity of Contract

The legal principle that a contract confers rights and imposes obligations only on the parties to the contract, barring any third party from enforcing or interfering with the agreement.

Policy Proceeds

The amount paid out on an insurance policy, typically upon the occurrence of the event insured against.

Uniform Commercial Code

A comprehensive set of laws governing commercial transactions in the United States, designed to harmonize legal standards across states.