This is the amount of receiving costs allocated to each unit of Product B. The problem asks for the per unit cost allocation of receiving costs for Product A.
This answer results from allocating receiving costs, engineering costs, machine setup costs and inspection costs for Product A, using receiving orders per product line to allocate receiving costs, production orders per product line to allocate engineering costs, production runs to allocate machine setup costs, and number of inspections to allocate inspection costs. The problem asks only for the per unit cost allocation of receiving costs for Product A.
The amount of cost to be allocated is $450,000 in receiving costs. The activity with respect to receiving orders is 50 orders for Product A and 150 orders for Product B. Product A's orders represent 50/200 of the total number of orders, or 25%. 25% of the $450,000 cost is $112,500. 30,000 units of Product A were produced and sold, so the per unit allocation of receiving costs for Product A is $112,500 ÷ 30,000 units = $3.75/unit.
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Using activity-based costing, the per unit overhead cost allocation of receiving costs for product A is
