Which of the following statements concerning the unit product cost of Product A8 is true?
A)The unit product cost of Product A8 under traditional costing is greater than its unit product under activity-based costing by $331.64.
B)The unit product cost of Product A8 under traditional costing is less than its unit product cost under activity-based costing by $331.64.
C)The unit product cost of Product A8 under traditional costing is less than its unit product cost under activity-based costing by $1,540.33.
D)The unit product cost of Product A8 under traditional costing is greater than its unit product under activity-based costing by $1,540.33.

Question

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $919,309 ÷ 7,800 DLHs = $117.86 per DLH (rounded)
Computation of traditional unit product cost: 11ea7998_5ebd_ace3_911b_055da6d7cca5_TB2627_00_TB2627_00 Computation of activity rates: 11ea7998_5ebd_ace4_911b_6bbb272e56af_TB2627_00_TB2627_00 Computation of the overhead cost per unit under activity-based costing. 11ea7998_5ebd_d3f5_911b_cb3b96800413_TB2627_00_TB2627_00 Computation of unit product cost under activity-based costing. 11ea7998_5ebd_fb06_911b_5f0cad77904e_TB2627_00_TB2627_00 The difference in unit product costs is: 11ea7998_5ebd_fb07_911b_d1d107e34c16_TB2627_00_TB2627_00 The unit product cost of Product A8 under traditional costing is greater than its unit product under activity-based costing by $331.64.
Reference: CH04-Ref28
Gradwell, Inc., manufactures and sells two products: Product K8 and Product I4.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below: 11ea7998_5ebe_2218_911b_d7c1dd1b45e7_TB2627_00_TB2627_00 The direct labor rate is $17.20 per DLH.The direct materials cost per unit for each product is given below: 11ea7998_5ebe_4929_911b_d59402bc6148_TB2627_00_TB2627_00 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: 11ea7998_5ebe_492a_911b_f173afb2a698_TB2627_00_TB2627_00

Which of the Following Statements Concerning the Unit Product Cost