Yallow,Inc

Multiple Choice

Yallow,Inc.manufactures teddy bears and dolls.Currently,Yallow makes 2,000 teddy bears each month.Each teddy bear uses $2.00 in direct materials and $0.50 in direct labor.Yallow uses two activities in manufacturing the teddy bears: Sewing and Processing.The cost associated with Sewing is $15,000 a month,allocated on the basis of direct labor hours.The cost associated with Processing is $10,000 a month,allocated on the basis of batches.Usage of the activity drivers are as follows: What is the total manufacturing cost for one teddy bear?

A) $2.50
B) $4.50
C) $7.00
D) $8.00