Evaluate the unit product cost of each product

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Reference no: EM1314112

Computation of cost of the products based on Activity Based Costing.

The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labor hours. The activity-based costing system would use three activity cost pools. Data relating to these activities for the current period are given below:

Activity

Estimated Overhead

Expected Activity

 

 

Cost Pool

Costs

Product C

Product D

Total

Machine setups

$13,630

130

160

290

Purchase orders

85,750

750

1,000

1,750

General factory

67,760

4,000

2,160

6,160

 

$167,140

 

 

 

Determine the unit product cost of each product for the current period using the activity-based costing approach.

Reference no: EM1314112

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