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

The Answer of 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