Acklin Company has two products: A and B. Annual production and sales are 600 units of Product A and 900 units of Product B.

The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products.

Product A requires 0.5 direct labor hours per unit and Product B requires 0.3 direct labor hours per unit.

The total estimated overhead cost for the next period is $63,322.

The company is now considering switching to an activity-based costing system. The new activity-based costing system would have three overhead activity cost pools- Activity 1, Activity 2, and General Factory-with estimated overhead costs and expected activity as follows:

Estimated Overhead Expected Activity (Allocation Base)

Activity Pool Cost Product A Product B Total
Activity 1 $18,900 700 200 900
Activity 2 15,631 1,000 100 1,100
General factory 28,791 300 270 570
Total $63,322

(Note: The General Factory activity pool's costs are allocated on the basis of direct labor hours.)

1. The overhead cost per unit of Product A under the traditional costing system is closest to:

A) $10.50

B) $55.55

C) $25.26

D) $7.11

2. The overhead cost per unit of Product A under the activity-based costing system is closest to:

A) $25.26

B) $73.44

C) $42.21

D) $55.55