Activitybased product costing
Sweet Sugar Company manufactures three products white sugar, brown sugar, and powdered sugar in a continuous production process. Senior
management has asked the controller to conduct an activitybased costing study. The controller identified the amount of factory overhead required by the
critical activities of the organization as follows:
The activity bases identified for each activity are as follows:
The activitybase usage quantities and units produced for the three products were determined from corporate records and are as follows:
Each product requires machine hour per unit.
Required:
If required, round all per unit amounts to the nearest cent.
Determine the activity rate for each activity.
Determine the total and perunit activity cost for all three products.
Why aren't the activity unit costs equal across all three products since they require the same machine time per unit?
The unit costs are different because the products consume many activities in ratios different from the
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