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1. XY Company makes products X and Y. The company uses activity-based costing (ABC). Number of cost driver units Cost Pool Total cost in cost
1. XY Company makes products X and Y. The company uses activity-based costing (ABC). Number of cost driver units Cost Pool Total cost in cost Product X Product Y pool Activity 1 $6,000 Activity 2 $2,500 20 5 Activity 3 $21,000 30 12 20 30 Compute allocated capacity costs for product X. A. Not enough information - need to know the total number of costs driver units for product X. B. $29,500 C. $19,400 D. $15,000 E. $2,400 You have the following data for product X: sales revenue $12,000, allocated fixed costs $2,000, variable costs $13,000. You cannot increase the price of product X or improve the production process to increase profitability. What should you do about product X? A. Drop the product both in the short term and in the long term. B. Keep the product both in the short term and in the long term. C. Keep the product in the short term and drop it in the long term. D. Drop the product in the short term and keep it in the long term. E. Do nothing - unprofitable products are just one of the costs of doing business
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