Adelberg Company has two products: A and B. The annual production and sales of Product A is 500 units and of Product B is 1,000 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor-hours per unit and Product B requires 0.2 direct labor-hours per unit. The total estimated overhead for next period is $68,756.The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools-Activity 1, Activity 2, and General Factory-with estimated overhead costs and expected activity as follows: EstimatedExpected ActivityActivity Cost
PoolsOverhead CostsProduct AProduct BTotalActivity 1$31,0311,0003001,300Activity 2 22,2491,6003001,900Order size 15,476200200400Total$68,756 (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.)The overhead cost per unit of Product B under the activity-based costing system is closest to: (Round your intermediate calculations to 2 decimal places.)
A. $34.38
B. $7.74
C. $18.41
D. $45.84
Answer: C
You might also like to view...
Generally speaking, a firm handshake will most likely communicate:
A) indifference B) ambiguity C) consideration D) abruptness E) calmness
Answer the following statements true (T) or false (F)
A FASB survey found that most enterprises entering into a pooling of interest believed that the combination would not have occurred if purchase accounting had been acquired.
The accounting equation is:
a. owners’ equity + assets = liabilities b. assets = owners’ equity – liabilities c. liabilities + assets = owners’ equity d. owners’ equity – assets = liabilities e. assets = liabilities + owners’ equity
Which of the following is a basic right of stockholders?
A) Stockholders may sell their stock back to the company if they wish. B) Stockholders may authorize a business contract on behalf of the corporation. C) Stockholders may receive dividends from corporate earnings. D) Stockholders may determine the issue price of common stock.