Reference no: EM132967748

A company uses activity-based costing to determine the costs of its three products: A, and B. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table:

Budgeted Activity
Activity Cost Pool           Budgeted Cost           Product A             Product B
Activity 1                      $104,000                       4,700                  4,500
Activity 2                      $79,000                       6,200                   7,200
Activity 3                            $127,000               4,200                       6,950

Problem 1: Annual production and sales level of Product A is 36,000 units, and the annual production and sales level of Product B is 71,250 units. What is the approximate overhead cost per unit of Product A under activity-based costing?

Multiple Choice

Option 1: $1.48
Option 2: $3.82
Option 3: $2.42
Option 4: $10.26
Option 5: $11.30