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Murphy Company produces two products: Standard and Deluxe. The company uses an activity-based ...

Murphy Company produces two products: Standard and Deluxe. The company uses an activity-based costing system. Murphy produced 8,000 units of Standard and 2,000 units of Deluxe. The company uses two activity cost pools, with estimated total cost and activity as follows:

Expected Activity

Activity Cost Pool

Estimated Cost

Standard

Deluxe

#1	$12,000	500	250
#2	$24,000	400	1,200

What is the cost per unit of Standard under activity-based costing?

▸ $1.75

▸ $16.00

▸ $9.00

▸ $15.00

Textbook

Managerial Accounting

Edition: 4^th

Author: Davis

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