Reference: 05-04
Monson Company Has Two Products: G and P

question 12

Multiple Choice

Reference: 05-04
Monson Company has two products: G and P. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools: $$\begin{array} { | l | l | l | l | l | } \hline \text { Activity } & & { \text { Expected Activity } } \\\hline \text { Cost Pool } & \begin{array} { l } \text { Estimated Ovhd. } \\\text { Cost }\end{array} & \text { Product G } & \text { Product P } & \text { Total } \\\hline \text { Activity 1 } & \$ 30,000 & 200 & 400 & 600 \\\hline \text { Activity 2 } & \$ 24,000 & 600 & 900 & 1,500 \\\hline \text { Activity 3 } & \$ 80,000 & 400 & 3,600 & 4,000 \\\hline\end{array}$$ The annual production and sales of Product G is 10,640 units. The annual production and sales of Product P is
26,600.
-The overhead cost per unit of Product P under activity-based costing is closest to:

• A)$30.16.
• B)$10.00.
• C)$4.00.
• D)$6.88.

---

Definitions:

Revised Article 3

Pertains to updates or changes made to Article 3 of the Uniform Commercial Code, primarily dealing with negotiable instruments.

UCC

The Uniform Commercial Code comprises an extensive set of rules that apply to all commercial dealings in the United States.

Negotiable

A term describing instruments or documents, such as checks or bills of lading, that are transferable from one person to another in good faith for value.

Contract Law

The area of law that governs the making, enforcement, and interpretation of agreements between parties.