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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 activity cost pools:
| Budgeted Activity | |||||||||
| Activity Cost Pool | Budgeted Cost | Product A | Product B | ||||||
| Activity 1 | $ | 99,000 | 4,200 | 4,000 | |||||
| Activity 2 | $ | 74,000 | 5,700 | 6,700 | |||||
| Activity 3 | $ | 117,000 | 3,700 | 6,450 | |||||
Annual production and sales level of Product A is 35,500 units, and the annual production and sales level of Product B is 70,750 units. What is the approximate overhead cost per unit of Product B under activity-based costing?
Multiple Choice
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$12.07
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$10.27
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$2.30
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$3.59
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$1.68
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