Which of the following statements concerning the unit product cost of Product N0 is true?
A)The unit product cost of Product N0 under traditional costing is less than its unit product cost under activity-based costing by $3,494.65.
B)The unit product cost of Product N0 under traditional costing is greater than its unit product under activity-based costing by $3,494.65.
C)The unit product cost of Product N0 under traditional costing is less than its unit product cost under activity-based costing by $337.28.
D)The unit product cost of Product N0 under traditional costing is greater than its unit product under activity-based costing by $337.28.

Question

Quizplus · Accepted Answer

Based on the calculations in the table, the unit product cost of Product N0 under traditional costing is $22,779.31, while the unit product cost under activity-based costing is $23,116.59. Therefore, the unit product cost of Product N0 under traditional costing is greater than its unit product under activity-based costing by $337.28. Choice D is the correct answer. Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $1,283,805 ÷ 11,900 DLHs = $107.88 per DLH (rounded)
Computation of traditional unit product cost: 11ea7998_5ec4_15a4_911b_eba42fba0714_TB2627_00_TB2627_00 Computation of activity rates: 11ea7998_5ec4_3cb5_911b_07ddb1c4c24a_TB2627_00_TB2627_00 Computation of the overhead cost per unit under activity-based costing. 11ea7998_5ec4_3cb6_911b_a36e219e4601_TB2627_00_TB2627_00 Computation of unit product cost under activity-based costing. 11ea7998_5ec4_63c7_911b_170c7728a6db_TB2627_00_TB2627_00 The difference in unit product costs is: 11ea7998_5ec4_63c8_911b_b5402655b216_TB2627_00_TB2627_00 The unit product cost of Product N0 under traditional costing is greater than its unit product under activity-based costing by $337.28.
Reference: CH04-Ref32
Wardsworth, Inc., manufactures and sells two products: Product I9 and Product Z9.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below: 11ea7998_5ec4_8ad9_911b_cd87b302ee8d_TB2627_00_TB2627_00 The direct labor rate is $26.00 per DLH.The direct materials cost per unit for each product is given below: 11ea7998_5ec4_8ada_911b_39a5eb02cd7b_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_5ec4_b1eb_911b_abda46b13bb6_TB2627_00_TB2627_00

Which of the Following Statements Concerning the Unit Product Cost