Lindsey Company Uses Activity-Based Costing

question 47

Multiple Choice

Lindsey Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 5,000 units and of Product B is 2,000 units. There are three activity cost pools, with total cost and activity as follows: The activity-based costing cost per unit of Product A is closest to:

• A)$14.11
• B)$13.77
• C)$7.00
• D)$17.70 The activity rates for each activity cost pool are computed as follows: The overhead cost charged to Product A is: Cost per unit = $70,550 ÷ 5,000 units = $14.11 per unit

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Definitions:

Breached Contract

Occurs when one party to a contract fails to fulfill its legal obligations as specified in the agreement, thereby violating the contract.

Private Sale

A transaction of goods or property conducted directly between individuals without the involvement of an intermediary or public auction.

Reasonable Notification

A requirement to give timely and clear information or warnings in various legal and regulatory contexts, ensuring that parties involved are properly informed.

Unique Goods

Items that are distinct in their characteristics, often irreplaceable, and cannot be substituted easily due to their rarity or specific traits.