Question
Osprey Games produces two versions of its very popular Mancala game. Budget Mancala is made using a plastic board and plastic marbles. Deluxe Mancala is
Osprey Games produces two versions of its very popular Mancala game. Budget Mancala is made using a plastic board and plastic marbles. Deluxe Mancala is made using a wooden board and glass marbles. Osprey has historically used a traditional costing system but has recently switched to an activity-based-costing system. Their traditional costing system used one cost driver (direct manufacturing labor hours) to allocate overhead.
Under the traditional costing system the cost of a Deluxe Mancala game was $24.00. After implementing the activity-based costing system the cost of a Deluxe Mancala game was determined to be $29.
The increase in the cost per unit of Deluxe Mancala under the activity-based costing system is due to differences in allocation of ________.
A. indirect costs
B. direct material costs
C. direct labor costs
D. prime costs
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