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X Company uses an activity-based costing allocation system. On January 1, 2020, its accountant budgeted the...

X Company uses an activity-based costing allocation system. On January 1, 2020, its accountant budgeted the following costs and cost drivers for three of the activities that are used in the ABC system:

Activity Budgeted cost       Cost driver
Purchasing $53,600       4,400 purchase orders
Assembly $134,000       98,700 parts
Packaging $80,400       14,100 finished units


In May of 2020, 646 units of Product C were finished, requiring $19,600 of direct materials, 6,000 direct labor hours, 1,089 parts, and 43 purchase orders.

How much of the three activity costs was allocated to Product C [round overhead rate(s) to two decimal places]?

Solutions

Expert Solution

Here we are calculating Activity cost incurred for product C .For this we have explained what is activity costing and how it is calculated and allocated to the product being manufactured.

Total activity costs being incurred for product C is $5686.98(activity costs ) .

Please refer the attachment for solution

Hit thumbs up , if u like the answer explanation.Thanks

ekkarill92 answered 1 year ago
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