Mellencamp, Inc., manufactures and sells two products: Product A3 and Product Y6. 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 $24.20 per DLH. The direct materials cost per unit is $146.60 for Product A3 and $256.20 for Product Y6. 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 Y6 under activity-based costing is closest to:
A)$1,151.80 per unit
B)$676.28 per unit
C)$1,082.58 per unit
D)$1,139.74 per unit

Question

Mellencamp, Inc., manufactures and sells two products: Product A3 and Product Y6. 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 $24.20 per DLH. The direct materials cost per unit is $146.60 for Product A3 and $256.20 for Product Y6. 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 Y6 under activity-based costing is closest to:
A)$1,151.80 per unit 
B)$676.28 per unit 
C)$1,082.58 per unit 
D)$1,139.74 per unit

Quizplus · Accepted Answer

The Answer of Mellencamp, Inc., manufactures and sells two products: Product A3 and Product Y6. 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 $24.20 per DLH. The direct materials cost per unit is $146.60 for Product A3 and $256.20 for Product Y6. 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 Y6 under activity-based costing is closest to:
A)$1,151.80 per unit 
B)$676.28 per unit 
C)$1,082.58 per unit 
D)$1,139.74 per unit