Arthur Company Has Two Products $\mathrm{S}$ And $\mathrm{D}$

question 24

Multiple Choice

Arthur Company has two products: $\mathrm{S}$ and $\mathrm{D}$ . The company uses activity-based costing and has prepared the following analysis, showing the estimated total overhead cost and expected activity for each of its three activity cost pools:

$\begin{array}{|l|r|r|r|r|}\hline\begin{array}{l}\text { Activity Cost } \\\text { Pool }\end{array} & \text { Estimated Cost } & \text { Product S } & \text { Product D } & \text { Total } \\\hline \text { Activity 1 } & \$ 20,000 & 100 & 400 & 500 \\\hline \text { Activity 2 } & 14,600 & 500 & 250 & 750 \\\hline \text { Activity 3 } & 90,000 & 300 & 2,700 & 3,000\\\hline\end{array}$

The annual production and sales of Product $\mathrm{S}$ is 4,547 units. The annual production and sales of Product $D$ is 7,913. Direct costs/unit for each product are as follows:

$\begin{array}{l|r|r|}\hline & \text { Product S } & \text { Product D } \\\hline \text { Direct Material } & \$ 1.50 & \$ 1.20 \\\hline \text { Direct Labour } & \$ 2.00 & \$ 2.50 \\\hline\end{array}$

-The total production cost per unit of Product D under activity-based costing is closest to which of the following?

• A) $16.15.
• B) $12.87.
• C) $16.37.
• D) $16.57.

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Definitions:

Gymnosperms

A group of seed-producing plants that includes conifers, cycads, Ginkgo, and gnetophytes, distinguished by having the seeds unprotected by an ovary.

Ginkgo Biloba

A species of tree known for its fan-shaped leaves and traditional use in medicine, particularly for memory enhancement.

Vegetatively

Relates to asexual reproduction in plants, where new plants grow from parts of existing plants, such as runners, bulbs, or cuttings, without the production of seeds or spores.

Microsporocytes

Cells that undergo meiosis to produce microspores, which eventually develop into male gametophytes in plants.