Reference: 05-06
Accola Company Uses Activity-Based Costing -The Overhead Cost Per Unit of Product a Is Closest

question 84

Multiple Choice

Reference: 05-06
Accola Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A are 1,100 units and of Product B are 700 units. There are three activity cost pools, with estimated costs and expected activity as follows: $$\begin{array} { | l | l | l | l | l | } \hline \text { Activity } & & \text { Expected Activity } \\\hline \text { Cost Pool } & \text { Estimated Cost } & \text { Product A } & \text { Product B } & \text { Total } \\\hline \text { Activity 1 } & \$ 18,271 & 600 & 500 & 1,100 \\\hline \text { Activity 2 } & \$ 35,891 & 1,600 & 300 & 1,900 \\\hline \text { Activity 3 } & \$ 48,796 & 440 & 420 & 860 \\\hline\end{array}$$
-The overhead cost per unit of Product A is closest to:

• A)$57.20.
• B)$22.70.
• C)$47.89.
• D)$59.23.

Calculate the amount of cash received from bond issuance and the bond carrying amount over its life.

Analyze the effect of selling bonds at a discount, premium, or face value on financial statements.

Determine the amount of gain or loss on the redemption of bonds.

Understand bond issuance and its impact on financial statements.

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Definitions:

Technologically Progressive

Characteristics of economies, firms, or industries that are consistently implementing and benefiting from new technologies, leading to increased efficiency and productivity.

Price Competition

A market situation where businesses attempt to attract customers by offering products or services at lower prices than their competitors.

Four-Firm Concentration Ratio

A measure that indicates the total market share controlled by the four largest firms in an industry, used to assess the degree of market concentration.

Indeterminate

A situation in which a clear outcome or result cannot be ascertained due to a lack of definitive information or multiple influencing factors.