The unit product cost of Product G2 under activity-based costing is closest to:

A) $1,202.79 per unit
B) $1,217.73 per unit
C) $808.83 per unit
D) $1,302.28 per unit

Question

The unit product cost of Product G2 under activity-based costing is closest to:A) $1,202.79 per unitB) $1,217.73 per unitC) $808.83 per unitD) $1,302.28 per unit

Riziki Kipendo · Accepted Answer

Final Answer : B, Explanation :  Using activity-based costing, the unit product cost for Product G2 is calculated by assigning the overhead costs to each product based on the activities that drive the costs.The total cost per activity is calculated as follows:Activity 1:$449,600 / 5,600 = $80 per unitActivity 2:$476,000 / 4,760 = $100 per unitActivity 3:$345,600 / 3,456 = $100 per unitTotal cost per unit:Direct materials $504Direct labor $240Activity 1 $80Activity 2 $100Activity 3 $293Total unit product cost = $1,217.73 per unit (rounded to nearest cent) Computation of activity rates:   Computation of the overhead cost per unit under activity-based costing.   Computation of unit product costs under activity-based costing.   Reference: CH04-Ref17Sivak, Inc., manufactures and sells two products: Product X4 and Product C5.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 $25.10 per DLH.The direct materials cost per unit for each product is given below:   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 G2 under activity-based costing is closest to:

A) $1,202.79 per unit
B) $1,217.73 per unit
C) $808.83 per unit
D) $1,302.28 per unit

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