Friday, 26 September 2014

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 7,000 units. There are three activity cost pools, with total cost and total activity as follows:

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 7,000 units. There are three activity cost pools, with total cost and total activity as follows:

   
Total Activity
  Activity Cost Pool Total Cost Product A Product B Total
  Activity 1 $28,600   120     530     650    
  Activity 2 $42,550   920     230     1,150    
  Activity 3 $129,340   840     3,620     4,460    

The activity-based costing cost per unit of Product A is closest to: (Round your intermediate calculations to 2 decimal places.)
$2.46
correct $7.96
$5.76
$12.65