Ravelo Corporation has provided the following data from its activity-based costing system: Data concerning the company's product L19B appear below: According to the activity-based costing system, the average cost of product L19B is closest to:
A)$48.19 per unit
B)$82.31 per unit
C)$85.56 per unit
D)$77.53 per unit

Question

Ravelo Corporation has provided the following data from its activity-based costing system:  Data concerning the company's product L19B appear below:  According to the activity-based costing system, the average cost of product L19B is closest to:
A)$48.19 per unit 
B)$82.31 per unit 
C)$85.56 per unit 
D)$77.53 per unit

Quizplus · Accepted Answer

To find the average cost per unit of product L19B, we need to add up the total costs for each cost pool and divide it by the total number of units produced:

Total cost for cost pool 1 = $312,000
Total cost for cost pool 2 = $729,600
Total cost for cost pool 3 = $91,800
Total cost for cost pool 4 = $36,000
Total cost for cost pool 5 = $166,500

Total cost of product L19B = $1,336,900

Total number of units produced = 15,600

Average cost per unit of product L19B = Total cost of product L19B / Total number of units produced
= $1,336,900 / 15,600
= $85.56 per unit

Therefore, the closest average cost per unit of product L19B is $85.56 per unit, which is option C.

Ravelo Corporation Has Provided the Following Data from Its Activity-Based