Reference: 05-06
Accola Company Uses Activity-Based Costing -The Overhead Cost Per Unit of Product a Is Closest

Reference: 05-06
Accola Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A are 1,100 units and of Product B are 700 units. There are three activity cost pools, with estimated costs and expected activity as follows: $$\begin{array} { | l | l | l | l | l | } \hline \text { Activity } & & \text { Expected Activity } \\\hline \text { Cost Pool } & \text { Estimated Cost } & \text { Product A } & \text { Product B } & \text { Total } \\\hline \text { Activity 1 } & \$ 18,271 & 600 & 500 & 1,100 \\\hline \text { Activity 2 } & \$ 35,891 & 1,600 & 300 & 1,900 \\\hline \text { Activity 3 } & \$ 48,796 & 440 & 420 & 860 \\\hline\end{array}$$
-The overhead cost per unit of Product A is closest to:

A) $57.20.
B) $22.70.
C) $47.89.
D) $59.23.

Correct Answer:

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