Allure Company Manufactures and Distributes Two Products,M and XY What Is the Total Overhead Per Unit Allocated to Product

question 5

Multiple Choice

Allure Company manufactures and distributes two products,M and XY.Overhead costs are currently allocated using the number of units produced as the allocation base.The controller has recommended changing to an activity-based costing (ABC) system.She has collected the following information:
$\begin{array}{|l|l|r|r|r|}\hline \text { Acturity } & \text { Cost Driser } & \text { Amount } & \text { M } & \times Y \\\text { Production } & \text { Number of } & \$ 82,000 & 8 & 12 \\\text { setups } & \text { setups } & & & \\\hline \text { Material } & \text { Number of } & 48,000 & 56 & 24 \\\text { handling } & \text { parts } & & & \\\text { Packaging } & \text { Number of } & 130,000 & 80,000 & 50,000 \\\text { costs } & \text { units } & & & \\\hline&&\underline{\$260,000}&&\\\hline\end{array}$

What is the total overhead per unit allocated to Product M using activity-based costing (ABC) ?

• A) $2.60.
• B) $2.27.
• C) $2.00.
• D) $1.83.

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