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Question(s) / Instruction(s):

Abel Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 295 units and of Product B is 495 units. There are three activity cost pools, with estimated costs and expected activity as follows:

                  Estimated          Expected Activity

  Activity Cost Pool           Costs                     Product A            Product B            Total

  Activity 1.............          $16,850                                 695                         195         890    

  Activity 2.............          $22,288                                 1,195                     795         1,990    

  Activity 3.............          $9,921                                   155         255         410    

The overhead cost per unit of Product B is closest to: (Round the predetermined overhead rate to two decimal places before calculating the cost.

a)            $14.02

b)            $77.86

c)            $71.06

d)            $37.91

 

 

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