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:

R-L

Refers to a circuit that contains both resistance (R) and inductance (L), affecting the phase and amplitude of the circuit's response to an AC input.

Exponential Curves

Graphs representing exponential functions, showing how values can grow rapidly due to constant proportionality rates.

Time Constants

A parameter that quantifies the response time of a system to a step input, notably in RC and RL circuits, characterized by the time it takes for a system to change significantly.

Electromagnetic Induction

The phenomenon where an electromotive force (EMF) is induced in a closed circuit by a change in the flux of magnetic field.