Determine the activity-based cost for each tape drive unit.
A) $97.73
B) $232.69
C) $394.12
D) $103.84

Question

Quizplus · Accepted Answer

Activity-based cost per tape drive unit = Total cost of activity ÷ Total number of tape drive units
Activity 1 cost per tape drive unit = $781,250 ÷ 2,500 = $312.50
Activity 2 cost per tape drive unit = $125,000 ÷ 2,500 = $50.00
Activity 3 cost per tape drive unit = $937,500 ÷ 2,500 = $375.00
Activity 4 cost per tape drive unit = $156,250 ÷ 2,500 = $62.50
Total activity-based cost per tape drive unit = $312.50 + $50.00 + $375.00 + $62.50 = $800.00
Therefore, the best choice is B, as it is the closest option to the calculated activity-based cost per tape drive unit.

Determine the Activity-Based Cost for Each Tape Drive Unit