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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 Summary

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

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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 ...

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