Ivanhoe Company produces two products: Standard and Deluxe. The company uses an activity-based costing system. Ivanhoe produced 8400 units of Standard and 2400 units of Deluxe. The company uses two activity cost pools, with estimated total cost and activity as follows: Expected Activity Activity Cost Pool Estimated Cost Standard Deluxe #1 $12400 540 290 #2 $24400 440 1240 What is the cost per unit of Standard under activity-based costing? $14.52 $7.50 $1.72 $14.94

Ivanhoe Company produces two products: Standard and Deluxe. The company uses an activity-based costing system. Ivanhoe produced 8400 units of Standard and 2400 units of Deluxe. The company uses two activity cost pools, with estimated total cost and activity as follows: Expected Activity Activity Cost Pool Estimated Cost Standard Deluxe #1 $12400 540 290 #2 $24400 440 1240 What is the cost per unit of Standard under activity-based costing? $14.52 $7.50 $1.72 $14.94

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 5PA: Medical Tape makes two products: Generic and Label. It estimates it will produce 423,694 units of...

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

		Expected Activity
Activity Cost Pool	Estimated Cost	Standard	Deluxe
#1	$12400	540	290
#2	$24400	440	1240

What is the cost per unit of Standard under activity-based costing?

$14.52

$7.50

$1.72

$14.94

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