Reference: 05-05
Abel Company Uses Activity-Based Costing -The Overhead Cost Per Unit of Product B Is Closest

Reference: 05-05
Abel Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A are 200 units and of Product B are 400 units. There are three activity cost pools, with estimated costs and expected activity as follows: $$\begin{array} { | l | l | l | l | l | } \hline \text { Activity } & & \text { Expected Activity } \\\hline \text { Cost Pool } & \text { Estimated Cost } & \text { Product A } & \text { Product B } & \text { Total } \\\hline \text { Activity 1 } & \$ 16,660 & 600 & 100 & 700 \\\hline \text { Activity 2 } & \$ 18,450 & 1,100 & 700 & 1,800 \\\hline \text { Activity 3 } & \$ 9,731 & 60 & 160 & 220 \\\hline\end{array}$$
-The overhead cost per unit of Product B is closest to:

A) $81.53.
B) $41.58.
C) $17.69.
D) $74.73.

Correct Answer:

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