What would be the allocation of period costs

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Reference no: EM132088157

Question: X Company, a merchandiser, buys and sells two different products, 1 and 2. The firm uses an activity-based costing allocation system to allocate its period costs to these products. Budgeted revenues and costs for the coming year are as follows:

	Product 1	Product 2	Total
Revenue	$1,240,000	$930,000	$2,170,000
Expenses
Cost of Good Sold	843,200	595,200	1,438,400
Period
Salaries			205,000
Utilities			28,000
Data entry			116,000

Salaries were allocated using Cost of Goods Sold as the cost driver. Driver information for the other two period costs are as follows:

Activity	Cost Driver	Product 1	Product 2
Utilities	kilowatt hours	79	27
Data entry	pages entered	1,840	2,895

Using the activity-based costing system, what would be the allocation of period costs to Product 2 [round rate(s) to the nearest cent]?

Reference no: EM132088157

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