Q1

Under a traditional job costing system, William understood that his primary product included direct costs of $7.60 per unit and indirect costs of $3.60 per unit. The activities used to generate that product involved machine setup, material moves, and assembly. Using ABC, William's MOH costs allocated to his primary product are $2.60 per unit. Calculate and compare the total product cost per unit under the traditional method and the ABC method. If William currently sells this product for $15.80 per unit, what gross margin percentage is he generating under each method? (Round answers to 2 decimal places, e.g. 15.25%.) Traditional ABC Gross margin percentage % %