A company makes two products using the same type of materials and skilled workers. The following information is available:
Fixed costs relating to material handling amount to $100,000. The cost driver for these costs is the volume of material purchased.
General fixed costs, absorbed on the basis of labour hours, amount to $180,000.
Using activity-based costing, what is the total fixed overhead amount to be absorbed into each unit of product B (to the nearest whole $)?
A. $113
B. $120
C. $40
D. $105