Annika Company Uses Activity-Based Costing

question 163

Multiple Choice

Annika Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 4,000 units and of Product B is 1,000 units. There are three activity cost pools, with total cost and activity as follows: The activity-based costing cost per unit of Product A is closest to:

• A) $20.40
• B) $10.00
• C) $18.15
• D) $17.00

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Definitions:

End-of-Period Spreadsheet

A tool, typically in spreadsheet format, used at the end of an accounting period to compile adjustments and prepare financial statements.

Adjusted Trial Balance

A list of all the accounts and their balances after adjusting entries have been made, used to prepare financial statements.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent ones, thereby preparing the temporary accounts for the next accounting period.

Journalize

The act of recording transactions in a company's journal, which is the first step in the accounting cycle.