Seldomridge, Inc., manufactures and sells two products: Product I5 and Product U0. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected ProductionDirect Labor-Hours Per UnitTotal Direct Labor-HoursProduct I57007.04,900Product U020010.02,000Total direct labor-hours 6,900The direct labor rate is $24.40 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per UnitProduct I5$116.10Product U0$212.10The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: EstimatedExpected ActivityActivity Cost PoolsActivity MeasuresOverhead CostProduct
I5Product U0TotalLabor-relatedDLHs$246,4684,9002,0006,900Product testingtests 10,494500400900Order sizeMHs 837,6604,7004,5009,200 $1,094,622 The unit product cost of Product U0 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)
A. $1,672.35 per unit
B. $2,042.50 per unit
C. $2,885.25 per unit
D. $2,504.73 per unit
Answer: C
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