FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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12

Lavender Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 1,500 units and of Product B is 3,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows:
 

Expected Activity

Activity Cost Pool

Estimated Cost

Product A

Product B

Total

Activity 1

$10,000

420

350

770

Activity 2

12,000

120

420

540

Activity 3

50,000

490

1,162

1,652

 

The cost per unit of Product B under activity-based costing is closest to which of the following?

 

Select one:
a. $16.35
b. $35.38
c. $24.10
d.  $31.90
 
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