The unit product cost of Product Z9 under activity-based costing is closest to:

A) $765.92 per unit
B) $749.13 per unit
C) $721.44 per unit
D) $417.30 per unit

Question

The unit product cost of Product Z9 under activity-based costing is closest to:A) $765.92 per unitB) $749.13 per unitC) $721.44 per unitD) $417.30 per unit

Danielle Swango · Accepted Answer

Final Answer : B, Explanation :  The unit product cost of Product Z9 under activity-based costing is calculated as follows:Activity 1: $120,000 ÷ 4,800 units = $25 per unitActivity 2: $292,500 ÷ 12,500 units = $23.40 per unitActivity 3: $420,000 ÷ 10,000 units = $42 per unitTotal cost per unit = $25 + $23.40 + $42 = $90.40Adding the markup percentage: $90.40 × 1.25 = $113 per unitAdding the additional fixed cost per unit: $113 + ($873,750 ÷ 7,500 units) = $225.90 per unitTherefore, the unit product cost of Product Z9 under activity-based costing is closest to $749.13 per unit (rounded to the 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-Ref33Wanger, Inc., manufactures and sells two products: Product G1 and Product F2.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 $15.30 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 Z9 under activity-based costing is closest to:

A) $765.92 per unit
B) $749.13 per unit
C) $721.44 per unit
D) $417.30 per unit

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