Use the Following Information to Answer the Following Questions

question 32

Multiple Choice

Use the following information to answer the following questions.Magnolia Company makes products B546 and C245.Information for overhead costs and for the two products appears below.The company makes 100,000 units of product B546 each year and 20,000 units of product C245.

What will be the total overhead cost of product C245 if all overhead is assigned using ABC and each activity above is treated as a separate pool?

• A)$8.60 per unit
• B)$90.00 per unit
• C)$15.00 per unit
• D)$47.00 per unit

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Definitions:

Selling Price

The price at which a product or service is sold to the consumer.

Inventory

The total amount of goods or materials held in stock by a business or organization for the purpose of resale or production.

Cost of Goods Sold

The direct expenses related to the production or purchase of products a company sells.

Molding

The process of shaping a malleable substance into a specific form using a rigid frame or mold.