Monson Corporation has two products: G and P.The company uses activity-based costing and has prepared the following analysis showing the total cost and activity for each of its three activity cost pools: The annual production and sales of Product G is 10, 640 units.The annual production and sales of Product P is 26, 600. The cost per unit of Product P under activity-based costing is closest to:
A)$4.00
B)$30.16
C)$10.00
D)$6.88

Question

Monson Corporation has two products: G and P.The company uses activity-based costing and has prepared the following analysis showing the total cost and activity for each of its three activity cost pools:  The annual production and sales of Product G is 10, 640 units.The annual production and sales of Product P is 26, 600. The cost per unit of Product P under activity-based costing is closest to:
A)$4.00 
B)$30.16 
C)$10.00 
D)$6.88

Quizplus · Accepted Answer

The activity rates are computed as follows:
 11eaa0c8_958a_186d_9cb2_cf8cde27f0c7_TB2487_00 The cost charged to Product P is:
 11eaa0c8_958a_3f7e_9cb2_ed9581092c84_TB2487_00 Cost per unit of Product P = $106, 400 ÷ 26, 600 units = $4 per unit

Monson Corporation Has Two Products: G and P