Accurso, Inc., manufactures and sells two products: Product J9 and Product S5. 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 $22.50 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: Which of the following statements concerning the unit product cost of Product S5 is true?
A)The unit product cost of Product S5 under traditional costing is greater than its unit product under activity-based costing by $269.49.
B)The unit product cost of Product S5 under traditional costing is less than its unit product cost under activity-based costing by $47.79.
C)The unit product cost of Product S5 under traditional costing is less than its unit product cost under activity-based costing by $269.49.

Question

Accurso, Inc., manufactures and sells two products: Product J9 and Product S5. 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 $22.50 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:  Which of the following statements concerning the unit product cost of Product S5 is true?
A)The unit product cost of Product S5 under traditional costing is greater than its unit product under activity-based costing by $269.49. 
B)The unit product cost of Product S5 under traditional costing is less than its unit product cost under activity-based costing by $47.79. 
C)The unit product cost of Product S5 under traditional costing is less than its unit product cost under activity-based costing by $269.49.

Quizplus · Accepted Answer

The Answer of Accurso, Inc., manufactures and sells two products: Product J9 and Product S5. 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 $22.50 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:  Which of the following statements concerning the unit product cost of Product S5 is true?
A)The unit product cost of Product S5 under traditional costing is greater than its unit product under activity-based costing by $269.49. 
B)The unit product cost of Product S5 under traditional costing is less than its unit product cost under activity-based costing by $47.79. 
C)The unit product cost of Product S5 under traditional costing is less than its unit product cost under activity-based costing by $269.49.