CMA5-4

CMAS-4. The Chocolate Baker specializes in chocolate baked goods. The firm has long assessed the profit- lity of a product line by comparing revenues to the cost of goods sold. However, Barry White, the firm's new accountant, wants to use an activity-based costing system t the cost of the delivery person. Listed below are activity and cost inf Chocolate Baker's major products. abi ormation relating to two of Muffins Cheesecake $53,000 26,000 $46,000 21,000 Delivery Activity 85 15 Minutes $20.00 Number of deliveries. ..150 10 Minutes Average length of delivery Cost per hour for delivery......... $20.00 Using activity-based costing, which one of the following statements is correct? a The muffins are $2,000 more profitable. b The cheesecakes are $75 more profitable. c. The muffins are $1,925 more profitable. d The muffins have a higher profitability as a percentage of sales and, therefore, are more advantageous