Rutty, Inc

question 13

Essay

Rutty, Inc., manufactures and sells two products: Product U6 and Product K9.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 $28.70 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: Required:
In all computations involving dollars in the following requirements, round off your answer to the nearest whole cent.
a.Determine the unit product cost of each product under the company's traditional costing method.
b.Determine the unit product cost of each product under the activity-based costing method.

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Definitions:

Sunk Cost

A cost that has already been incurred and cannot be recovered, which should not influence future business decisions.

Fixed Cost Financing

A financing strategy where the costs remain constant regardless of the level of production or sales.

Future Cash Flows

Expected cash receipts and payments a business anticipates receiving or paying out over a future period.

Bias

A preconception or inclination towards something, potentially leading to unfair judgments or decisions in various contexts.