(Activity-Based Costing) Samuelson uses activity-based costing. The company manufactures two products, X and Y. The annual production and sales of Products X Y are 3,000 and 2,000 units, respectively. There are three activity cost pools, with estimated total cost and expected activity as follows:
|
Expected Activity |
||||
|
Cost Pool |
Estimated Cost |
X |
Y |
Total |
|
Activity 1 |
$12,000 |
300 |
500 |
800 |
|
Activity 2 |
15,000 |
100 |
400 |
SOO |
|
Activity 3 |
32,000 |
400 |
1,200 |
1,600 |
|
Total costs |
$59,000 |
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- Calculate the overhead cost per unit of Products X and Y under activity-based costing.
- Samuelson wants to contrast its overhead allocation with that under the traditional costing method it previously used. Samuelson previously charged its overhead costs of $59,000 to products in proportion to machine hours. Each unit of X and Y consumed five machine hours in production. Calculate the overhead cost per unit of Products X and Y under the traditional method of overhead allocation.