Which of the following statements concerning the unit product cost of Product I5 is true?
A)The unit product cost of Product I5 under traditional costing is greater than its unit product under activity-based costing by $344.02.
B)The unit product cost of Product I5 under traditional costing is less than its unit product cost under activity-based costing by $494.70.
C)The unit product cost of Product I5 under traditional costing is greater than its unit product under activity-based costing by $494.70.
D)The unit product cost of Product I5 under traditional costing is less than its unit product cost under activity-based costing by $344.02.

Question

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $939,917 ÷ 5,700 DLHs = $164.90 per DLH (rounded)
Computation of traditional unit product cost: 11ea7998_5eb4_d312_911b_2f121d3d448e_TB2627_00_TB2627_00 Computation of activity rates: 11ea7998_5eb4_d313_911b_7d1e624df9b5_TB2627_00_TB2627_00 Computation of the overhead cost per unit under activity-based costing. 11ea7998_5eb4_fa24_911b_e9d027280c44_TB2627_00_TB2627_00 Computation of unit product cost under activity-based costing. 11ea7998_5eb5_2135_911b_21d639471e09_TB2627_00_TB2627_00 The difference in unit product costs is: 11ea7998_5eb5_2136_911b_b734f46a69a5_TB2627_00_TB2627_00 The unit product cost of Product I5 under traditional costing is greater than its unit product under activity-based costing by $344.02.
Reference: CH04-Ref21
Faz, Inc., manufactures and sells two products: Product X0 and Product W7.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below: 11ea7998_5eb5_2137_911b_ed0b747df4c9_TB2627_00_TB2627_00 The direct labor rate is $19.60 per DLH.The direct materials cost per unit is $144.50 for Product X0 and $126.00 for Product W7.
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: 11ea7998_5eb5_4848_911b_d53fcd769d9a_TB2627_00_TB2627_00

Which of the Following Statements Concerning the Unit Product Cost