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extrl83 extrl83
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9 months ago
Murphy Company produces two products: Standard and Deluxe. The company uses an activity-based costing system. Murphy produces 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 PoolEstimated CostStandardDeluxe
#1$12,000500250
#2$24,0004001,200
What is the cost per unit of Deluxe under activity-based costing?

▸ $11.00

▸ $1.75

▸ $15.00

▸ $16.00
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Managerial Accounting

Managerial Accounting


Edition: 4th
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bodie1980bodie1980
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9 months ago
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$11.00

Activity #1: $12,000 × [250 ÷ (500 + 250)] = $4,000;
Activity #2: $24,000 × [1,200 ÷ (400 + 1,200)] = $18,000;
($4,000 + $18,000) ÷ 2,000 units of Deluxe = $11.00 per unit of Deluxe
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