Reference: 05-04
Monson Company Has Two Products: G and P

Multiple Choice

Reference: 05-04
Monson Company has two products: G and P. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools: $$\begin{array} { | l | l | l | l | l | } \hline \text { Activity } & & { \text { Expected Activity } } \\\hline \text { Cost Pool } & \begin{array} { l } \text { Estimated Ovhd. } \\\text { Cost }\end{array} & \text { Product G } & \text { Product P } & \text { Total } \\\hline \text { Activity 1 } & \$ 30,000 & 200 & 400 & 600 \\\hline \text { Activity 2 } & \$ 24,000 & 600 & 900 & 1,500 \\\hline \text { Activity 3 } & \$ 80,000 & 400 & 3,600 & 4,000 \\\hline\end{array}$$ The annual production and sales of Product G is 10,640 units. The annual production and sales of Product P is
26,600.
-The activity rate under the activity-based costing system for Activity 2 is closest to:

A) $26.67.
B) $21.97.
C) $89.33.
D) $16.00.