Lindsey Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 5,000 units and of Product B is 2,000 units. There are three activity cost pools, with total cost and activity as follows: The activity-based costing cost per unit of Product A is closest to:
A)$14.11
B)$13.77
C)$7.00
D)$17.70 The activity rates for each activity cost pool are computed as follows: The overhead cost charged to Product A is: Cost per unit = $70,550 ÷ 5,000 units = $14.11 per unit

Question

Lindsey Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 5,000 units and of Product B is 2,000 units. There are three activity cost pools, with total cost and activity as follows:  The activity-based costing cost per unit of Product A is closest to:
A)$14.11 
B)$13.77 
C)$7.00 
D)$17.70 The activity rates for each activity cost pool are computed as follows: The overhead cost charged to Product A is: Cost per unit = $70,550 ÷ 5,000 units = $14.11 per unit

Quizplus · Accepted Answer

The Answer of Lindsey Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 5,000 units and of Product B is 2,000 units. There are three activity cost pools, with total cost and activity as follows:  The activity-based costing cost per unit of Product A is closest to:
A)$14.11 
B)$13.77 
C)$7.00 
D)$17.70 The activity rates for each activity cost pool are computed as follows: The overhead cost charged to Product A is: Cost per unit = $70,550 ÷ 5,000 units = $14.11 per unit

Lindsey Company Uses Activity-Based Costing