Lindsey Company Uses Activity-Based Costing The Cost Per Unit of Product a Under Activity-Based Costing

Multiple Choice

Lindsey Company uses activity-based costing. The company has two products: A andB. The annual production and sales of Product A is 5,000 units and of Product B is 2,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows: $\begin{array}{lrr}&\text { Estimated}&& \text { Expected Activity }\\\text { Activity Cost Pool }&\text { cost }&\text { ProductA}&\text { Product B}&\text { Total }\\ \text {Activity 1. } &£ 24,000& 200 &800 &1,000\\ \text { Activity 2. } &£36,900 & 750 & 150 &900\\ \text { Activity 3.} &£ 63,000 &1,000 &800&1,800\\\end{array}$


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

A) £14.11.
B) £13.77.
C) £7.00.
D) £17.70.