The unit product cost of Product Z9 under activity-based costing is closest to:
A)$765.92 per unit
B)$749.13 per unit
C)$721.44 per unit
D)$417.30 per unit

Question

Quizplus · Accepted Answer

The unit product cost of Product Z9 under activity-based costing is calculated as follows:
Activity 1: $120,000 ÷ 4,800 units = $25 per unit
Activity 2: $292,500 ÷ 12,500 units = $23.40 per unit
Activity 3: $420,000 ÷ 10,000 units = $42 per unit

Total cost per unit = $25 + $23.40 + $42 = $90.40
Adding the markup percentage: $90.40 × 1.25 = $113 per unit
Adding the additional fixed cost per unit: $113 + ($873,750 ÷ 7,500 units) = $225.90 per unit
Therefore, the unit product cost of Product Z9 under activity-based costing is closest to $749.13 per unit (rounded to the nearest cent). Computation of activity rates: 11ea7998_5ec5_ea71_911b_b9fbd6d1d2c1_TB2627_00_TB2627_00 Computation of the overhead cost per unit under activity-based costing. 11ea7998_5ec6_1182_911b_85d096f91687_TB2627_00_TB2627_00 Computation of unit product costs under activity-based costing. 11ea7998_5ec6_1183_911b_05b8c7b71144_TB2627_00_TB2627_00 Reference: CH04-Ref33
Wanger, Inc., manufactures and sells two products: Product G1 and Product F2.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below: 11ea7998_5ec6_3894_911b_93e2fe2497e9_TB2627_00_TB2627_00 The direct labor rate is $15.30 per DLH.The direct materials cost per unit for each product is given below: 11ea7998_5ec6_5fa5_911b_c92903e517b3_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_5ec6_5fa6_911b_ebfe4ef4cf8e_TB2627_00_TB2627_00

The Unit Product Cost of Product Z9 Under Activity-Based Costing