ssume that a pet food manufacturer is considering adding two types of pet food to their existing product line. Research had determined that there is good demand for dog food in forty pound bags and cat food in one-half pound cans.
The company identified the following partial list of activities, costs, and activity drivers expected for the next year.

-Refer to the data above. How much overhead cost will be assigned to each unit of product using activity-based costing (ABC)?

Question

ssume that a pet food manufacturer is considering adding two types of pet food to their existing product line. Research had determined that there is good demand for dog food in forty pound bags and cat food in one-half pound cans.
The company identified the following partial list of activities, costs, and activity drivers expected for the next year.

-Refer to the data above. How much overhead cost will be assigned to each unit of product using activity-based costing (ABC)?

Quizplus · Accepted Answer

According to the ABC calculation, the total overhead cost is $4,315.20 for Dog Food and $164.80 for Cat Food. To assign overhead cost per unit, we need to divide the total overhead cost by the number of units produced. For Dog Food, the overhead cost per unit is $8.60 ($4,315.20÷500 units), and for Cat Food, it is $0.33 ($164.80÷500 units). Therefore, the best choice is C.

Ssume That a Pet Food Manufacturer Is Considering Adding Two