Problem:
1. Danno Company manufactures two products, Product F and Product G. The company expects to produce and sell 600 units of Product F and 6,000 units of Product G during the current year. The company uses activity-based costing to compute unit product costs for external reports. Data relating to the company's three activity cost pools are given below for the current year:
|
Estimated Overhead
|
Expected Activity
|
|
Activity Cost Pool
|
Costs
|
Product F
|
Product G
|
Total
|
|
Machine setups
|
$5,250
|
60
|
150
|
210
|
|
Purchase orders
|
$74,100
|
620
|
1,280
|
1,900
|
|
General factory
|
$89,880
|
840
|
12,000
|
12,840
|
| |
$130,890
|
|
|
|
Required:
Using the activity-based costing approach, determine the overhead cost per unit for each product.