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Question
A company has two products: A1 and B2. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools:
| Budgeted Activity | |||
| Activity Cost Pool | Budgeted Cost | Product A1 | Product B2 |
| Activity 1 | $48,000 | 1,200 | 4,800 |
| Activity 2 | $63,000 | 2,240 | 4,760 |
| Activity 3 | $80,000 | 7,200 | 800 |
Annual production and sales level of Product A1 is 8,480 units, and the annual production and sales level of Product B2 is 22,310 units. What is the approximate overhead cost per unit of Product A1 under activity-based costing?
A. $8.00
B. $9.00
C. $10.00
D. $12.00
E. $4.00
Answer
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