When using the ABC costing method to allocate $200,000 of OH to two products, Activity A is assigned $60,000 of OH and Activity B is assigned $140,000 of OH. Activity A has 60,000 cost driver units and Activity B has 70,000 cost driver units. How much OH is assigned to Product XYZ if it consumes 20,000 Activity A cost driver units and 40,000 Activity B cost driver units?
OH allocation rate for activity A is OH allocated to activity A ($60,000) divided by activity A cost driver units. OH allocation rate for ...
The solution contains calculation of overhead cost assigned to each product.