Hewett, Inc., manufactures and sells two products: Product E7 and Product U7. 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 $29.50 per DLH. The direct materials cost per unit is $164.10 for Product E7 and $289.50 for Product U7. 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 U7 under activity-based costing is closest to:
A)$1,277.42 per unit
B)$1,199.08 per unit
C)$1,951.54 per unit
D)$1,431.02 per unit

Question

Hewett, Inc., manufactures and sells two products: Product E7 and Product U7. 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 $29.50 per DLH. The direct materials cost per unit is $164.10 for Product E7 and $289.50 for Product U7. 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 U7 under activity-based costing is closest to:
A)$1,277.42 per unit 
B)$1,199.08 per unit 
C)$1,951.54 per unit 
D)$1,431.02 per unit

Quizplus · Accepted Answer

The Answer of Hewett, Inc., manufactures and sells two products: Product E7 and Product U7. 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 $29.50 per DLH. The direct materials cost per unit is $164.10 for Product E7 and $289.50 for Product U7. 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 U7 under activity-based costing is closest to:
A)$1,277.42 per unit 
B)$1,199.08 per unit 
C)$1,951.54 per unit 
D)$1,431.02 per unit