Alexander Inc.uses activity-based costing.The company produces two products: Snaps and Pops.The expected annual production of Snaps is 1,500 units,while the expected annual production of Pops is 2,200 units.There are three activity cost pools: Assembly,Testing,and Packing.The estimated costs and activities for each of these three activity pools follows:
The overhead cost per unit of Pops would be closest to
A)$15.30.
B)$5.32.
C)$7.80.
D)$31.00.

Question

Alexander Inc.uses activity-based costing.The company produces two products: Snaps and Pops.The expected annual production of Snaps is 1,500 units,while the expected annual production of Pops is 2,200 units.There are three activity cost pools: Assembly,Testing,and Packing.The estimated costs and activities for each of these three activity pools follows: 
The overhead cost per unit of Pops would be closest to
A)$15.30. 
B)$5.32. 
C)$7.80. 
D)$31.00.

Quizplus · Accepted Answer

B)
Assembly $5,548 / 760 × 130 = 949.00
Testing $25,715 / 1,850 × 650 = 9,035.00
Packing $2,401 / 245 × 17 = 1,715.00
Total 11,699.00 / 2,200 units = $5.32