Question
A company manufactures two products, P and Q. The
overhead costs and related activity drivers are as follows: Activity usage by products: What is the total overhead allocated to Product P using Activity-Based Costing?Solution
For Product P Setup cost = total setups needed x per set up cost = 20×2,000=40,000 Inspection cost = total inspections needed x per inspection cost =150×200=30,000 Total overhead cost = 40,000 + 30,000 = Rs.70,000
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