Karsten,Inc. ,manufactures and sells two products: Product M8 and Product I2.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below: The direct labor rate is $21.20 per DLH.The direct materials cost per unit for each product is given below: The company is considering adopting an activity-based costing system with the following activity cost pools,activity measures,and expected activity: The unit product cost of Product I2 under activity-based costing is closest to:
A)$1,133.78 per unit
B)$1,179.38 per unit
C)$1,439.33 per unit
D)$969.56 per unit

Question

Karsten,Inc. ,manufactures and sells two products: Product M8 and Product I2.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below:  The direct labor rate is $21.20 per DLH.The direct materials cost per unit for each product is given below:  The company is considering adopting an activity-based costing system with the following activity cost pools,activity measures,and expected activity:  The unit product cost of Product I2 under activity-based costing is closest to:
A)$1,133.78 per unit 
B)$1,179.38 per unit 
C)$1,439.33 per unit 
D)$969.56 per unit

Quizplus · Accepted Answer

Computation of activity rates:
 11eaa3fe_3348_7a55_908b_b1da38ba56d5_TB2461_00 Computation of the overhead cost per unit under activity-based costing.
 11eaa3fe_3348_a166_908b_c51d0d9c3d28_TB2461_00 Computation of unit product costs under activity-based costing.
 11eaa3fe_3348_a167_908b_155c06eedaaa_TB2461_00