Question
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 | $87,000 | 3,000 | 2,800 | |
| Activity 2 | $62,000 | 4,500 | 5,500 | |
| Activity 3 | $93,000 | 2,500 | 5,250 | |
Annual production and sales level of Product A is 34,300 units, and the annual production and sales level of Product B is 69,550 units. What is the approximate overhead cost per unit of Product A under activity-based costing?
| A. | $3.00 | |
| B. | $2.00 | |
| C. | $10.28 | |
| D. | $15.00 | |
| E. | $2.33 |
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Principles Of External Auditing
Authors: Brenda Porter, David Hatherly, Jon Simon
3rd Edition
0470018259, 9780470018255
