Adelberg Company has two products: A and B. The annual production and sales of Product...
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Adelberg Company has two products: A and B. The annual production and sales of Product Ais 500 units and of Product Bis 1,000 units. The company has traditionally used direct labor-hours a's the basis for applying all manufacturing overhead to products Product Arequires 0.4 direct labor hours per unit and Product B requires 0.2 direct labor-hours per unit. The total estimated overhead for next period is $68,756. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools-Activity 1. Activity 2, and Order Size-with estimated overhead costs and expected activity as follows: Estimated Expected Activity Overhead Activity Cost Pools Costs Product A Product B Total Activity 1 $ 31,031 1,000 300 1,300 Activity 2 22.249 1,600 300 1,900 Order size 15,476 200 200 400 Total $ 68,756 (Note: The Order Size activity cost pool's costs are allocated on the basis of direct laborhours. The overhead cost per unit of Product B under the traditional costing system is closest to (Round your intermediate calculations to 2 decimal places.) Select one O A $4.77 OB. $34 38 O C$7.74 OD S2 34
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