Matt Company uses activity-based costing. The company has two products: A and B.
ID: 2653496 • Letter: M
Question
Matt Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 8,000 units and of Product B is 7,500 units. There are three activity cost pools, with total cost and total activity as follows:
Total Activity
The activity-based costing cost per unit of Product A is closest to: (Round your intermediate calculations to 2 decimal places.)
$7.07 per units
$6.27 per units
$14.16 per units
$8.17 per units
Matt Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 8,000 units and of Product B is 7,500 units. There are three activity cost pools, with total cost and total activity as follows:
Explanation / Answer
Total cost of Product A as per activity based costing = 65360
Units produced of product A = 8000 units
Per unit cost of product A = 65360/8000 i.e 8.17 per units
.
Particulars Total C ost Total Cost Pool Cost Driver Product A Product A Cost Driver Product B Product B Activity 1 27950 650 150 6450 500 21500 Activity 2 39856 1060 830 31208 230 8648 Activity 3 152874 4470 810 27702 3660 125172 220680 6180 1790 65360 4390 155320