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A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each
A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activities: Activity Budgeted Cost Activity Cost Driver Budgeted Activity Product A Product B Activity 1 $ 106,000 Square feet 4,900 4,700 Activity 2 $ 81,000 Units produced 6,400 7,400 Activity 3 $ 131,000 Setups 4,400 7,150 Annual production and sales level of Product A is 36,200 units, and the annual production and sales level of Product B is 71,450 units. What is the approximate overhead cost per unit of Product B under activity-based costing? Multiple Choice $3.91 $1.41 $2.47 $11.04 $10.26
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