Question
Macpherson Limited produces two products: Standard and Deluxe. The company uses an activity-based costing system. Macpherson produces 8,000 units of Standard and 2,000 units of
Macpherson Limited produces two products: Standard and Deluxe. The company uses an activity-based costing system. Macpherson produces 8,000 units of Standard and 2,000 units of Deluxe. The company uses two activity cost pools, with estimated total cost and activity as follows:
|
|
| Expected Activity | |
| Activity Cost Pool | Estimated Cost | Standard | Deluxe |
| #1 | $12,000 | 500 | 250 |
| #2 | $24,000 | 400 | 1,200 |
What is the cost per unit of Macpherson under activity-based costing?
| a. | $15.00
| |
| b. | $11.00
| |
| c. | $16.00
| |
| d. | $1.75
|
What is the main reason for generating new information provided by activity-based costing?
| a. | calculate variances.
| |
| b. | help managers make better decisions.
| |
| c. | reduce product costs.
| |
| d. | reduce total overhead costs.
|
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Selected Chapters From Managerial Accounting Creating Value In A Dynamic Business Environment
Authors: Ronald W. Hilton
Edition
0073043346, 978-0073043340
