Remaining Time: 1 hour, 10 minutes, 04 seconds. v Question Completion Status d.

Question

Remaining Time: 1 hour, 10 minutes, 04 seconds. v Question Completion Status d. Costs of or QUESTION 15 makes two products: Product A and Product B, Annual production and sales are 500 units of Product A and 900 units of Product B. The Adams Corporation company per unit and Product B to an activity-based costing system for the purpose of computing unit product costs three overhead activity cost pools-Activity 1, Activity 2, and General Factory.-with estimated overhead costs&expected; activity as follows has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor-bours requires 0.5 direct labor-hours per unit. The total estimated overbead for next period is $67,522. The company is considering switching for external reports. The new activity-based costing system would have Estimated Costs Product A Product 8Total Activity Cost Pool Activity 1 Activity 2. General Factory. Total 200 700 2,800 450 500 S 6,915 24,948 35,659 7,522 2,100 200 650 the basis of direct labor-hours, the overhead cost per unit of Product A under the actrvity-based If the General Factory activity cost pool's costs are allocated on costing system is closest to: O a 21.94 O b 67.66 ? ?. 48.23

Explanation / Answer

overhead cost per unit for product A Activity 1 (6915*300/500)= 4149 Activity 2 (24,948*2100/2800)= 18711 General factory (35,659*200/650)= 10972 total overhead allocated 33832 overhead cost per unit =   33,832/500 67.66 answer option b) $67.66 per unit

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