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)identical to
C)less than
D)None of these answers are correct.

Question

Quizplus · Accepted Answer

The new ABC system assigns more direct costs to product SR6, resulting in a higher cost per unit compared to the traditional system. Therefore, the total amount of indirect costs assigned to product SR6 using the traditional method is less than the total amount assigned using ABC.

Answer the Following Questions Using the Information Below