Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods. A) Snowboards have fewer production control and number of moves than do skis, so skis have higher activity costs per unit. B) The activity-based overhead allocation reveals that snowboards are more costly on a per-unit basis than are the skis. C) The multiple production department factory overhead rate method distorts the unit costs. D) The activity-based method separately accounts for the production control and materials handling activity costs, decreasing cost distortion.

Brian has just finished college. he wants to set up a small business to make and sell fireworks. he registers his company and acquires a license from the government. he finds that most of his competitors are selling fireworks at an extremely low price. he would like to make more money, so he decides to innovate and develop better fireworks. he sells his fireworks at a higher price, and they are a huge hit with the customers. after a few years, he earns enough profit to set up a bigger fireworks factory that complies with the government’s health and safety regulations. he even starts exporting fireworks overseas. which type of economy does this scenario describe?