Answer:
$11.00 per unit.
Explanation:
We know,
Total overhead cost = Estimated cost for pools × (Expected activity of specific activity ÷ Total expected activity)
Given,
Estimated cost for pool 1 = $12,000
Estimated cost for pool 2 = $24,000
Total expected activity for pool 1 = Regula + Enhanced = 500 + 250 hours = 750 hours
Total expected activity for pool 2 = Regula + Enhanced = 400 + 1,200 hours = 1,600 hours
As we have to find the overhead cost per unit of Enhanced,
Therefore, Total overhead cost = [$12,000 × (250 ÷ 750)] + [$24,000 × (1,200 ÷ 1,600)] = $4,000 + 18,000 = $22,000
Again, we know,
the overhead cost per unit under ABC costing = Total overhead cost ÷ Number of units produced for a specific unit
Cost per unit of Enhanced products = $22,000 ÷ 2,000 units = $11 per unit.
