Keller's company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A are 8,000 units and of Product B are 6,000 units. There are three activity cost pools, with the estimated total cost and expected activity as follows: Activity Cost Pool Estimated Product A Product B Total Cost Activity 1 $20,000 100 400 500 Activity 2 $37,000 800 200 1,000 Activity 3 $91,200 800 1,000 3,800 Keller's company cost per unit of Product B under activity-based costing is closest to: A. $6.60 B. $8.63 C. $15.90 D. $9.60

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter6: Activity-based, Variable, And Absorption Costing
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Keller's company uses activity-based costing. The company has two products: A and B.
The annual production and sales of Product A are 8,000 units and of Product B are
6,000 units. There are three activity cost pools, with the estimated total cost and
expected activity as follows:
Activity Cost Pool Estimated Product A Product B Total Cost
Activity 1
$20,000 100
400
500
Activity 2
$37,000 800
200
1,000
Activity 3
$91,200 800
1,000
3,800
Keller's company cost per unit of Product B under activity-based costing is closest to:
A. $6.60
B. $8.63
C. $15.90
D. $9.60
Transcribed Image Text:Keller's company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A are 8,000 units and of Product B are 6,000 units. There are three activity cost pools, with the estimated total cost and expected activity as follows: Activity Cost Pool Estimated Product A Product B Total Cost Activity 1 $20,000 100 400 500 Activity 2 $37,000 800 200 1,000 Activity 3 $91,200 800 1,000 3,800 Keller's company cost per unit of Product B under activity-based costing is closest to: A. $6.60 B. $8.63 C. $15.90 D. $9.60
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