Tabby Totes, a manufacturer of travel carriers for felines, uses an ABC system.Tabby produces two carriers, Comfort Carrier and Luxury Carrier.Production and sales for Comfort Carrier is 800 units and Luxury Carrier is 600 units.Tabby uses thee activity cost pools.Estimated costs and expected activities is as follows: $\begin{array}{lllll}\text { Activity Cost } & \text { Estimated } \
\text { Pool } & \text { Cost } & \text { Expected Activity }\
\hline&&\text { Comfort } & \text { Luxury } & \
&&\text { Carrier } & \text { Carrier } & \text { Total }\
\hline \text { Activity 1 } & \$ 12,000 & 200 & 100 & 300 \
\text { Activity 2 } & \$ 18,000 & 400 & 200 & 600 \
\text { Activity 3 } & \$ 10,000 & 400 & 400 & 800
\end{array}$ The cost per unit of the Comfort Carrier is:
A)$40.00
B)$23.53
C)$42.00
D)$31.25
E)$28.57

Question

Quizplus · Accepted Answer

The cost per unit for the Comfort Carrier is calculated by first determining the total cost allocated to the Comfort Carrier from each activity cost pool, then dividing by the number of Comfort Carrier units produced. For Activity 1, the cost per activity is $12,000 / 300 = $40. The Comfort Carrier has 200 activities, so the cost is 200 * $40 = $8,000. For Activity 2, the cost per activity is $18,000 / 600 = $30. The Comfort Carrier has 400 activities, so the cost is 400 * $30 = $12,000. For Activity 3, the cost per activity is $10,000 / 800 = $12.50. The Comfort Carrier has 400 activities, so the cost is 400 * $12.50 = $5,000. The total cost for the Comfort Carrier is $8,000 + $12,000 + $5,000 = $25,000. Dividing this by the number of Comfort Carrier units (800) gives $25,000 / 800 = $31.25 per unit.

Tabby Totes, a Manufacturer of Travel Carriers for Felines, Uses