34a.

Faz, Inc., manufactures and sells two products: Product X0 and Product W7. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:

	Expected Production	Direct Labor-Hours Per Unit	Total Direct Labor-Hours
Product X0	1,500	4	6,000
Product W7	510	2	1,020
Total direct labor-hours			7,020

The direct labor rate is $30.60 per DLH. The direct materials cost per unit is $155.50 for Product X0 and $137 for Product W7.

The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

		Estimated		Expected Activity
Activity Cost Pools	Activity Measures	Overhead Cost		Product X0	Product W7	Total
Labor-related	DLHs	$	283,078	6,000	1,020	7,020
Production orders	orders		20,048	610	810	1,420
Order size	MHs		248,334	4,110	4,210	8,320
		$	551,460

The overhead applied to each unit of Product X0 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

Multiple Choice

• $81.79 per unit

• $257.82 per unit

• $248.81 per unit

• $314.22 per unit

34b.

Faz, Inc., manufactures and sells two products: Product X0 and Product W7. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:

	Expected Production	Direct Labor-Hours Per Unit	Total Direct Labor-Hours
Product X0	1,500	5	7,500
Product W7	540	3	1,620
Total direct labor-hours			9,120

The direct labor rate is $33.60 per DLH. The direct materials cost per unit is $158.50 for Product X0 and $140 for Product W7.

The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

		Estimated		Expected Activity
Activity Cost Pools	Activity Measures	Overhead Cost		Product X0	Product W7	Total
Labor-related	DLHs	$	286,078	7,500	1,620	9,120
Production orders	orders		20,348	640	840	1,480
Order size	MHs		249,894	4,140	4,240	8,380
		$	556,320

Which of the following statements concerning the unit product cost of Product W7 is true? (Round your intermediate calculations to 2 decimal places.)

Multiple Choice

• The unit product cost of Product W7 under traditional costing is greater than its unit product cost under activity-based costing by $166.64.

• The unit product cost of Product W7 under traditional costing is less than its unit product cost under activity-based costing by $50.55.

• The unit product cost of Product W7 under traditional costing is greater than its unit product cost under activity-based costing by $50.55.

• The unit product cost of Product W7 under traditional costing is less than its unit product cost under activity-based costing by $166.64.