12. North Company has two products: X and Y. The company uses activity-based cos

Question

12. North Company has two products: X and Y. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools:

Activity                              Estimated                                                                      Expected Activity                                     

Cost Pool                           Overhead Cost                                  Product X                     Product Y                       Total

Firing                                  $ 29,200                                                             1,000                             500                         1,500

Running                             $ 40,000                                                                 200                             800                         1,000

Setting                               $180,000                                                                600                         5,400                         6,000

The annual production and sales level of Product X is 9,094 units. The annual production and sales level of Product Y is 15,826. What is the activity rate under the activity-based costing system for Setting? (rounded to $00.00) What is the overhead cost per unit of Product X under activity-based costing (rounded to $00.00)?

Explanation / Answer

Answer is $30 per Activities

=Cost/Total Activities for settings

=180000/6000 =$30 per Activities for setting

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