A company has two products: standard and deluxe. The company expects to produce 36,375 standard units and

Question:

A company has two products: standard and deluxe. The company expects to produce 36,375 standard units and 62,240 deluxe units. It uses activity-based costing and has prepared the following analysis showing budgeted cost and cost driver activity for each of its three activity cost pools.

Budgeted Activity of

Cost Driver

Activity Cost Pool Budgeted Cost Standard Deluxe

Activity 1 . . . . . . . . . . . . . . . . ........ $93,000..................... 2,500................. 5,250

Activity 2 . . . . . . . . . . . . . . . ........ . $92,000..................... 4,500................. 5,500

Activity 3 . . . . . . . . . . . . . . . . ........ $87,000..................... 3,000................ 2,800

Required

1. What is the overhead cost per unit for the standard units?

2. What is the overhead cost per unit for the deluxe units?

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