Weiskopf, Inc., manufactures and sells two products: Product E6 and Product J2. 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 E66005.03,000Product J29007.06,300Total direct labor-hours 9,300The direct labor rate is $18.10 per DLH. The direct materials cost per unit for each product is given below: Direct MaterialsCost per UnitProduct E6$176.50Product J2$200.00The 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 E6Product
J2TotalLabor-relatedDLHs$430,0323,0006,3009,300Product testingtests 68,368300500800Order sizeMHs 478,9625,0004,9009,900 $977,362 Which of the following statements concerning the unit product cost of Product J2 is true? (Round your intermediate calculations to 2 decimal places.)
A. The unit product cost of Product J2 under traditional costing is greater than its unit product cost under activity-based costing by $42.54.
B. The unit product cost of Product J2 under traditional costing is less than its unit product cost under activity-based costing by $101.07.
C. The unit product cost of Product J2 under traditional costing is less than its unit product cost under activity-based costing by $42.54.
D. The unit product cost of Product J2 under traditional costing is greater than its unit product cost under activity-based costing by $101.07.
Answer: D
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