Pachero, Inc., manufactures and sells two products: Product T1 and Product U6. 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 $15.90 per DLH. The direct materials cost per unit is $259.80 for Product T1 and $188.80 for Product U6. 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 U6 under activity-based costing is closest to:
A)$2,305.84 per unit
B)$1,124.00 per unit
C)$1,472.65 per unit
D)$3,025.80 per unit

Question

Pachero, Inc., manufactures and sells two products: Product T1 and Product U6. 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 $15.90 per DLH. The direct materials cost per unit is $259.80 for Product T1 and $188.80 for Product U6. 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 U6 under activity-based costing is closest to:
A)$2,305.84 per unit 
B)$1,124.00 per unit 
C)$1,472.65 per unit 
D)$3,025.80 per unit

Quizplus · Accepted Answer

The Answer of Pachero, Inc., manufactures and sells two products: Product T1 and Product U6. 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 $15.90 per DLH. The direct materials cost per unit is $259.80 for Product T1 and $188.80 for Product U6. 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 U6 under activity-based costing is closest to:
A)$2,305.84 per unit 
B)$1,124.00 per unit 
C)$1,472.65 per unit 
D)$3,025.80 per unit