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Using activity-based absorption costing, the unit product cost for Product B is closest to:

Using activity-based absorption costing, the unit product cost for Product B is closest to:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Using activity-based absorption costing, the unit product cost for Product B is closest to: Multiple Choice O O O O $22.78 $23.38 $27.78 $25.48
Transcribed Image Text:Using activity-based absorption costing, the unit product cost for Product B is closest to: Multiple Choice O O O O $22.78 $23.38 $27.78 $25.48
A company makes two products-Product A and B. Data regarding the two products follow: Direct Labor-Hours per Unit Product A Product B 0.75 0.50 Annual Production 20,000 units 50,000 units Additional information is as follows: a. Product A requires $15 in direct materials per unit, and Product B requires $8. b. The direct labor wage rate is $18 per hour. c. The company's activity-based absorption costing system has the following activity cost pools: Activity Cost Pool (and Activity Measures) Machine setups (number of setups) Special processing (machine-hours) General factory (Direct labor-hours) Estimated Overhead Cost $100,000 $200,000 $150,000 Using activity-based absorption costing, the unit product cost for Product B is closest to: Expected Activity Product A Product B 300 100 2,000 15,000 6,000 25,000 Total 400 8,000 40,000
Transcribed Image Text:A company makes two products-Product A and B. Data regarding the two products follow: Direct Labor-Hours per Unit Product A Product B 0.75 0.50 Annual Production 20,000 units 50,000 units Additional information is as follows: a. Product A requires $15 in direct materials per unit, and Product B requires $8. b. The direct labor wage rate is $18 per hour. c. The company's activity-based absorption costing system has the following activity cost pools: Activity Cost Pool (and Activity Measures) Machine setups (number of setups) Special processing (machine-hours) General factory (Direct labor-hours) Estimated Overhead Cost $100,000 $200,000 $150,000 Using activity-based absorption costing, the unit product cost for Product B is closest to: Expected Activity Product A Product B 300 100 2,000 15,000 6,000 25,000 Total 400 8,000 40,000
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