A company produces two products in one department. Forecast data concerning the products for the next accounting period are shown as following tables.

Product X	Product Y
Forecast output (units)	100	300
Machine hours per unit	1	3
Number of customer orders	30	70
Number of quality control inspections	20	30

Cost pools	Cost amount ($)	Cost driver
Machine operating	10,000	Machine hours
Order processing	2,000	Number of customer orders
Quality control	1,000	Number of quality control inspections

Required:

Calculate the overhead cost to be absorbed by each of the products, using an activity-based method (using the relevant cost drivers to trace overhead costs to the individual products).

Answer rating: 100% (QA)

Absorbed Overhead Cost per Unit using ActivityBased Costing ABC Heres how to calculate the absorbed ... View the full answer