A Company Has Two Products: A1 and B2 Annual Production and Sales Level of Product A1 Is 8,480

question 155

Multiple Choice

A company has two products: A1 and B2.It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools: $$\begin{array} { | l | l | r | r | } \hline & &{ \text { Budgeted Activity } } \\\hline \begin{array} { l } \text { Activity Cost } \\\text { Pool }\end{array} & \begin{array} { l } \text { Budgeted } \\\text { Cost }\end{array} & \text { Product A1 } & \text { Product B2 } \\\hline \text { Activity 1 } & \$ 48,000 & 1,200 & 4,800 \\\hline \text { Activity 2 } & \mathbf { \$ 3 , 0 0 0 } & \mathbf { 2 , 2 4 0 } & 4,760 \\\hline \text { Activity 3 } & \mathbf { \$ 8 0 , 0 0 0 } & 7,200 & \mathbf { 8 0 0 } \\\hline\end{array}$$ Annual production and sales level of Product A1 is 8,480 units, and the annual production and sales level of Product B2 is 22,310 units.What is the approximate overhead cost per unit of Product A1 under activity-based costing?

• A)$8.00
• B)$9.00
• C)$10.00
• D)$12.00
• E)$4.00

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Definitions:

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A phase in team development marked by the establishment of order and cohesion among team members as they work towards common goals.

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