Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Faz, Inc., manufactures and sells two products: Product XO and Product W7. Data concerning the expected production of each product and the expected total direct
Faz, Inc., manufactures and sells two products: Product XO 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: Product Xo Product W7 Total direct labor-hours Expected Direct Labor- Total Direct Production Hours Per UnitLabor-Hours 2,000 8,000 550 1,100 9,100 The direct labor rate is $34.60 per DLH. The direct materials cost per unit is $159.50 for Product XO and $141 for Product W7. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Expected Activity Activity Cost Pools Labor-related Production orders Order size Estimated Activity Overhead Measures Cost DLHS $287,078 orders 20,448 MHS 251,074 $558,600 Product X Product W7 8,000 1,100 650 850 4,150 4,250 Total 9,100 1,500 8,1400 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 $192.37 The unit product cost of Product W7 under traditional costing is less than its unit product cost under activity-based costing by $8123 The unit product cost of Product W7 under traditional costing is greater than its unit product cost under activity-based costing by $8123 product cost under activity based The unit product cost of Product W7 under traditional costing is less than its costing by $192.37
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started