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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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