Acton Company has two products: A and B. The annual production and sales of Product A is 830 units and of Product B is 530 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.6 direct labor-hours per unit and Product B requires 0.5 direct labor-hours per unit. The total estimated overhead for next period is $92,203. 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: Estimated Overhead Expected Activity Activity Cost Pool Costs Product A Product B Total Activity 1............. $14,502 530 630 1,160 Activity 2............. $64,950 2,530 530 3,060 General Factory... $12,751 498 265 763 Total................... $92,203 (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 traditional costing system is closest to: (Round your final answer to two decimal places.) $60.42 $13.78 $10.61 $8.92

Acton Company has two products: A and B. The annual production and sales of Product A is 830 units and of Product B is 530 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.6 direct labor-hours per unit and Product B requires 0.5 direct labor-hours per unit. The total estimated overhead for next period is $92,203. 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:

	Estimated Overhead	Expected Activity
Activity Cost Pool	Costs	Product A	Product B	Total
Activity 1.............	$14,502	530	630	1,160
Activity 2.............	$64,950	2,530	530	3,060
General Factory...	$12,751	498	265	763
Total...................	$92,203

(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 traditional costing system is closest to: (Round your final answer to two decimal places.)

	$60.42
	$13.78
	$10.61
	$8.92

Answer
$60.42