Why matt company uses activity-based costing

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Reference no: EM13343221

Matt Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 9,000 units and of Product B is 6,500 units. There are three activity cost pools, with total cost and total activity as follows:

 

 

 

Total Activity

  Activity Cost Pool

Total Cost

Product A

Product B

Total

  Activity 1

$26,840  

140    

470    

610    

  Activity 2

$42,705  

880    

290    

1,170    

  Activity 3

$125,700  

830    

3,360    

4,190    

The activity-based costing cost per unit of Product A is closest to: (Round your intermediate calculations to 2 decimal places.)

A.

$4.82

B.

$7.02

C.

$2.32

 

Reference no: EM13343221

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