Question:
A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools:
|
|
Budgeted Activity
|
|
Activity Cost Pool
|
Budgeted Cost
|
Product A
|
Product B
|
|
Activity 1
|
$87,000
|
3,000
|
2,800
|
|
Activity 2
|
$62,000
|
4,500
|
5,500
|
|
Activity 3
|
$93,000
|
2,500
|
5,250
|
Annual production and sales level of Product A is 34,300 units, and the annual production and sales level of Product B is 69,550 units. What is the approximate overhead cost per unit of Product A under activity-based costing?
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A.
|
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$3.00
|
|
B.
|
|
$2.00
|
|
C.
|
|
$10.28
|
|
D.
|
|
$15.00
|
|
E.
|
|
$2.33
|