Answer:
$107.30
Explanation:
Overhead cost for Product B under Activity based costing is as follows:
For Activity 1:
= Estimated overhead cost × (Expected activity ÷ Total activity)
= $109,319 × (2,400 ÷ 4,900)
= $53,544
For Activity 2:
= Estimated overhead cost × (Expected activity ÷ Total activity)
= $135,033 × (2,200 ÷ 5,700)
= $52,118
Activity 3:
= Estimated overhead cost × (Expected activity ÷ Total activity)
= $143,990 × (1,180 ÷ 2,380)
= $71,390
Total Expense :
= $53,544 + $52,118 + $71,390
= $177,052
Overhead Per unit cost:
= Total Expense ÷ Annual production and sales of Product B
= $177,052 ÷ 1,650 units
= $107.30
Therefore, the overhead cost per unit of Product B is closest to $107.30.
