Estimated total cost and expected activity

Reference no: EM13146239

Matt Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 8,000 units and of Product B is 6,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows:

Activity Estimated Expected Activity

Cost Pool Cost Product A Product B Total

Activity 1 $20,000 100 400 500

Activity 2 $37,000 800 200 1,000

Activity 3 $91,200 800 3,000 3,800

The cost per unit of Product A under activity-based costing is closest to:

a. $2.40.

b. $3.90.

c. $10.59.

d. $6.60.

Reference no: EM13146239

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