Under an Activity-Based Costing System, What Is the Per-Unit Overhead

question 2

Multiple Choice

Under an activity-based costing system, what is the per-unit overhead cost of Economy?

• A) $141.
• B) $164.
• C) $225.
• D) $228.
• E) None of the other answers is correct.

---

Definitions:

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is received or paid.

Net 30 Credit Policy

A payment term indicating that payment is due in full 30 days after the goods or services have been delivered.

Switch Break-Even Point

The analysis used to determine the point at which the cost of switching to a different product, service, or system is recouped through subsequent cost savings or benefits.

Variable Cost

Costs that vary directly with the level of production or volume of goods and services provided.