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Adelberg Corporation makes two products: Product A and Product B. Annual production and sales are 1,500 units of Product A and 1,500 units of
Adelberg Corporation makes two products: Product A and Product B. Annual production and sales are 1,500 units of Product A and 1,500 units of Product B. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor-hours per unit and Product B requires 0.2 direct labor-hours per unit. The total estimated overhead for next period is $87,630. 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 overhead activity cost pools-Activity 1, Activity 2, and General Factory-with estimated overhead costs and expected activity as follows: Activity Cost Pool Estimated Overhead Costs Expected Activity Product A Product B Total Activity 1 Activity 2 $ 41,400 15,720 1,000 500 1,500 800. 400 1,200 General Factory 30,510 600 300 900 Total $ 87,630 (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.) The overhead cost per unit of Product B under the activity-based costing system is closest to: Multiple Choice $24.30
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