Answer the following questions using the information below:
Cannady produces six products. Under their traditional cost system using one cost driver, SR6 costs $168.00 per unit. An analysis of the activities and their costs revealed that three cost drivers would be used under the new ABC system. The new cost of SR6 was determined to be $178.00 per unit.
-The total amount of indirect costs assigned to product SR6 using the traditional method is ________ the total amount assigned using ABC.
A) more than
B) less than
C) identical to
D) None of these answers are correct.

Question

Quizplus · Accepted Answer

The new cost using ABC is higher than the cost using traditional system, meaning the amount of indirect costs assigned to SR6 using ABC is higher than that assigned using the traditional method. Therefore, the total amount assigned using ABC is less than the total amount assigned using the traditional method.

Answer the Following Questions Using the Information Below