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:

Exercise Discretion

involves making decisions based on one's judgment and authority in situations where the rules may allow for flexibility or the application of personal judgment.

Surveillance Of Citizens

The monitoring of behavior, activities, or information of people, typically by governments, for the purpose of influencing, managing, directing, or protecting them.

Ethical Problem

A situation or decision that involves conflicting moral principles or values, requiring ethical judgment.

Use Of Authority

The application or exertion of power and control by individuals in positions of leadership or governance.