Allure Company manufactures and distributes two products, M and XY. Overhead costs are currently allocated...
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Accounting
Allure Company manufactures and distributes two products, M and XY. Overhead costs are currently allocated using the number of units produced as the allocation base. The controller has recommended changing to an activity-based costing (ABC) system. She has collected the following information:
| Activity | Cost Driver | Amount | M | XY | ||||
| Production setups | Number of setups | $ | 96,000 | 12 | 28 | |||
| Material handling | Number of parts | 46,000 | 42 | 28 | ||||
| Packaging costs | Number of units | 225,500 | 90,000 | 60,000 | ||||
| $ | 367,500 | |||||||
What is the total overhead per unit allocated to Product M using activity-based costing (ABC)?
Multiple Choice
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$2.13.
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$2.93.
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$2.37.
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$2.45.
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