Godwin Company Has Identified the Following Activities Related to Indirect

question 38

Multiple Choice

Godwin Company has identified the following activities related to indirect production costs:
$$\begin{array} { l l l } \text { Activity } & \text { Activity Costs } & \text { Cost Drivers } \\\text { Machine Setup } & \$ 180,000 & 1,500 \text { setup hours } \\\text { Materials Handling } & \$ 50,000 & 12,500 \text { pounds of materials } \\\text { Electric Power } & \$ 20,000 & 20,000 \text { kilowatt hours }\end{array}$$
Godwin Company has obtained the following data concerning two products:
$\begin{array}{lll}&\text { Prodirct } A&\text { Prodirct } B\\\text { Number of units produced } & 4,000 & 20,000 \\\text { Direct materials cost } & \$ 20,000 & \$ 25,000 \\\text { Direct labor cost } & \$ 12,000 & \$ 20,000 \\\text { Number of setup hours } & 100 & 120 \\\text { Pounds of materials used } & 500 & 1,500 \\\text { Kilowatt-hours } & 1,000 & 2,000\end{array}$
Using activity-based costing,what is the total production cost per unit for Product B?

• A) $1.12 per unit
• B) $2.25 per unit
• C) $3.00 per unit
• D) $3.37 per unit

---

Definitions:

Current Account Deficit

A measurement of a country's trade where the value of goods and services it imports exceeds the value of goods and services it exports.

Capital Account

A national account that shows the changes in asset ownership for a country, including foreign investments.

Dollar Depreciation

A decline in the value of the U.S. dollar relative to other currencies, affecting international trade and investment.

Foreign Assets

Assets owned by residents of a country that are located in foreign countries, including stocks, bonds, real estate, and direct investments.