a company computed the following activity rates using activity - based costing.\nactivity\tactivity…

a company computed the following activity rates using activity - based costing.\nactivity\tactivity rate\nsetup\t$ 2,000 per setup\nmaterials handling\t$ 100 per materials requisition\ninspection\t$ 4 per unit inspected\nthe companys deluxe model used the following activities to produce 2,000 units. compute the overhead cost per unit for the deluxe model using activity - based costing.\nactivity\tactivity rate\nsetup\t6 setups\nmaterials handling\t50 materials requisitions\ninspection\t2,000 units inspected\nmultiple choice\n$6.00.\n$8.50.\n$12.50.

a company computed the following activity rates using activity - based costing.\nactivity\tactivity rate\nsetup\t$ 2,000 per setup\nmaterials handling\t$ 100 per materials requisition\ninspection\t$ 4 per unit inspected\nthe companys deluxe model used the following activities to produce 2,000 units. compute the overhead cost per unit for the deluxe model using activity - based costing.\nactivity\tactivity rate\nsetup\t6 setups\nmaterials handling\t50 materials requisitions\ninspection\t2,000 units inspected\nmultiple choice\n$6.00.\n$8.50.\n$12.50.

Answer

Explanation:

Step1: Calculate setup cost

$2000\times6 = 12000$

Step2: Calculate materials - handling cost

$100\times50=5000$

Step3: Calculate inspection cost

$4\times2000 = 8000$

Step4: Calculate total overhead cost

$12000 + 5000+8000=25000$

Step5: Calculate overhead cost per unit

$\frac{25000}{2000}=12.5$

Answer:

$12.50$