Calculation of Cost Allocation of a Product Using an Activity-based Allocation System


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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