Jacomo Company uses activity based costing to determine unit product costs for e

Question

Jacomo Company uses activity based costing to determine unit product costs for external reports. The company has two products: F and G. The annual production and sales of Product F is 10,000 units and of Product G is 4,000 units. There are three overhead activity centers, with estimated overhead costs and expected activity as follows:

Expected activity
Activity Center Overhead Costs Product F Product G Total
1 18000 300 200 500
2 16000 500 100 600
3 27000 600 300 900

The predetermined overhead rate under activity based costing for Activity 3 is closest to:
$30.00
$30.50
$90.00
$67.78

Explanation / Answer

$30.50

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