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Solution Library
Calculation of Cost Allocation of a Product Using an Activity-based Allocation System
Question
X Company makes two products, A and B, and uses an activity-based costing overhead allocation system, with three cost pools and three cost drivers. Budgeted costs and driver information for 2015 were as follows:
Cost Pool 1 Cost Pool 2 Cost Pool 3
Budgeted costs $108,000 $51,000 $26,000
Cost drivers
Product A 82,900 61,300 69,500
Product B 65,600 47,800 51,900
What was the allocation to product B?
Summary: This question belongs to accounting and discusses about budgeted costs and driver information and to calculate cost allocation for a product.
Total word count: 23
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