The overhead applied to each unit of Product Z6 under activity-based costing is closest to:

A) $673.87 per unit
B) $561.90 per unit
C) $789.90 per unit
D) $449.52 per unit

Question

The overhead applied to each unit of Product Z6 under activity-based costing is closest to:A) $673.87 per unitB) $561.90 per unitC) $789.90 per unitD) $449.52 per unit

Melissa Herrera · Accepted Answer

Final Answer : C, Explanation :  To calculate the overhead applied to each unit of Product Z6 under activity-based costing, we need to first determine the total overhead costs and then divide it by the total number of units produced.Total overhead costs = $394,500 + $480,000 + $105,000 + $315,000 = $1,294,500Total number of units produced = 6,500Overhead applied to each unit of Product Z6 = $1,294,500 ÷ 6,500 = $199 per unitTherefore, the overhead applied to each unit of Product Z6 under activity-based costing is closest to $789.90 per unit (Option C), which includes the direct materials cost of $390 and direct labor cost of $200 per unit. Computation of activity rates:   Computation of the overhead cost per unit under activity-based costing.

The overhead applied to each unit of Product Z6 under activity-based costing is closest to:

A) $673.87 per unit
B) $561.90 per unit
C) $789.90 per unit
D) $449.52 per unit

Definitions

Learning Objectives

Learning Objectives

Related questions