The Chocolate Baker Specializes in Chocolate Baked Goods

Multiple Choice

The Chocolate Baker specializes in chocolate baked goods. The firm has long assessed the profitability of a product line by comparing revenues to the cost of goods sold. However, Barry White, the firm's new accountant, wants to use an activity-based costing system that takes into consideration the cost of the delivery person. Listed below are activity and cost information relating to two of The Chocolate Baker's major products.
Using activity-based costing, which one of the following statements is correct?

A) The muffins are $2,000 more profitable.
B) The cheesecakes are $75 more profitable.
C) The muffins are $1,925 more profitable.
D) The muffins have a higher profitability as a percentage of sales and, therefore, are more advantageous.