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

Multiple Choice

Annika Company uses activity-based costing. The company has two products: A andB. The annual production and sales of Product A is 4,000 units and of Product B is 1,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows: $\begin{array}{lrr}&\text { Estimated}&& \text { Expected Activity }\\\text { Activity Cost Pool }&\text { cost }&\text { ProductA}&\text { Product B}&\text { Total }\\ \text {Activity 1. } &£ 18,000& 700 & 300 &1,100\\ \text { Activity 2. } &£ 24,000 & 500 & 100 &600\\ \text { Activity 3.} &£ 60,000 &800 &400&1,200\\\end{array}$


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

A) £20.40.
B) £10.00.
C) £18.15.
D) £17.00.