Ralston Company identified the following activities, estimated costs for each activity, and identified cost drivers for each
Question:
The company produces two products, MX1 and MX2. Information about these products for the month of July follows:
Actual cost driver activity levels for the month of July are as follows
Required:
a. Using the estimates for the year, compute the predetermined overhead rate for each activity (this is step 4 of the activity-based costing process).
b. Using the activity rates calculated in requirement a and the actual cost driver activity levels shown for July, allocate overhead to the two products for the month of July (this is step 5 of the activity-based costing process).
c. For each product, calculate the overhead cost per unit for the month of July. Round results to the nearest cent.
d. For each product, calculate the product cost per unit for the month of July. Round results to the nearest cent.
Step by Step Answer: