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Addy Company has two products: A and B. The annual production and sales of Product Ais 1.700 units and of Product B is 1.100 units.
Addy Company has two products: A and B. The annual production and sales of Product Ais 1.700 units and of Product B is 1.100 units. The company has traditionally used direct labour hours as the basis for applying all manufacturing overhead to products Product A requires 0.3 direct labour hours per unit, and Product B requires 0.6 direct labour hours per unit. The total estimated overhead for next period is $98,785 The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three factory overhead activity cost pools-Activity 1. Activity 2 and General Factory-with estimated overhead costs and expected activity as follows: Expected Activity Activity Cost Estimated Product A Product B Total Pool Overhead Cost Activity 1 $40.000 1,220 600 1,820 Activity 2 16,700 1,700 150 1,850 General 51,100 590 690 1,280 Factory Total $107,800 (Note. The General Factory activity cost pool's costs are allocated on the basis of direct labour hours.) Sad The overhead cost per unit of Product B under the activity-based costing system is closest to which of the following? Help Save & EX Submit Multiple Choice $26.09 $35.28 $3716 G $38 26
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