Hadley,Inc.manufactures a product that uses $15 in direct materials and $5 in direct labor per unit.Under the traditional costing system Hadley uses,manufacturing overhead applied to each unit is $12.However,Hadley is considering switching to an ABC system.Under the ABC system,the total activity cost would be $25.What is the total manufacturing cost per unit for Hadley under the ABC system?
A)$20
B)$25
C)$32
D)$45

Question

Quizplus · Accepted Answer

The total manufacturing cost per unit under the ABC system is calculated by adding the direct materials ($15), direct labor ($5), and the total activity cost under the ABC system ($25), which equals $45.