A company has two products: A and B. It uses activity-based costing and prepares the...
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Accounting
A company has two products: A and B. It uses activity-based costing and prepares the following analysis showing budgeted cost and activity for each of its three activity cost pools:
Cost Pool
Overhead Cost Budgeted
Product A
Product B
Total
Activity 1
$ 80,000
200
800
1,000
Activity 2
$ 58,400
1,000
500
1,500
Activity 3
$360,000
600
5,400
6,000
The annual production and sales level of Product A is 18,188 units and the annual production and sales level of Product B is 31,652 units. The approximate overhead cost per unit of Product B under activity-based costing is:
Group of answer choices
a. $2.02
b. $5.00
c. $12.87
d. $22.40
Answer & Explanation
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