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Matt Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 8,000 units and of...

Matt Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 8,000 units and of Product B is 6,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows:

Activity Estimated Expected Activity
Cost Pool Cost Product A Product B Total
Activity 1 $20,000 100 400 500
Activity 2 $37,000 800 200 1,000
Activity 3 $91,200 800 3,000 3,800
The cost per unit of Product A under activity-based costing is closest to:

$2.40.
$3.90.
$10.59.
$6.60.
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Accounting-8093683.xls

Activity
Estimated costs
A
Activity 1
20,000
Activity 2
37,000
Activity 3
91,200 B
100
800
800 Cost
A Total
400
200
3,000 500
1,000
3,800 40
37
24 4,000
29,600
19,200
52,800
8000 Units
6.6
The cost...

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