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
	$7.96
	$5.76
	$12.65

The activity rates for each activity cost pool are computed as follows:

	Total Cost	Total Activity	Activity Rate
Activity 1	$28,600	650	$44.00
Activity 2	$42,550	1,150	$37.00
Activity 3	$129,340	4,460	$29.00

The overhead cost charged to Product A is:

	Activity Rate	Activity	ABC Cost
Activity 1	$44.00	120	$5,280
Activity 2	$37.00	920	$34,040
Activity 3	$29.00	840	$24,360
			$63,680

Cost per unit = $63,680 ÷ 8,000 units = $7.96 per unit