Jacomo Company uses activity based costing to determine unit product costs for e

Question

Jacomo Company uses activity based costing to determine unit product costs for external reports. The company has two products: F and G. The annual production and sales of Product F is 10,000 units and of Product G is 4,000 units. There are three overhead activity centers, with estimated overhead costs and expected activity as follows:
Expected Activity

Activity Center Overhead Costs Product F Product G Total

Activity 1 $18,000 300 200 500

Activity 2 $16,000 500 100 600

Activity 3 $27,000 600 300 900


The cost for Activity 1 assigned to Product G will be:
$36
$7,200
$10,800
$67.78

Explanation / Answer

$10,800

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