Matt Company Uses Activity-Based Costing $\quad$ $\quad$ $\quad$

Multiple Choice

Matt Company uses activity-based costing. The company has two products: A andB. The annual production and sales of Product A is 8,000 units and of Product B is 6,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows: $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Estimated \quad\quad\quad Expectedactivity }$
$\begin{array}{lrr}\text { Activity CostPool }&\text {Cost }&\text {ProductA}&\text {Product B}&\text {Total }\\ \text { Activity1 } &£20,000&100&400&500\\ \text { Activity2} &£37,000&800&200&1,000\\ \text { Activity3 } &£91,200&800&3,000&3,800\\\end{array}$

The cost per unit of Product A under activity-based costing is closest to

A) £2.40.
B) £3.90.
C) £10.59.
D) £6.60.