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    Activity based costing used to allocate $200,000 to 2 products

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    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?

    a. $50,000
    b. $100,000
    c. $150,000
    d. $60,000

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    Solution Preview

    Hi,

    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 ...

    Solution Summary

    The solution contains calculation of overhead cost assigned to each product.

    $2.49

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