Essay
Hammer, Inc., manufactures and sells two products: Product W7 and Product I5. 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 $27.10 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:
Required:
What is the difference between the unit product costs under the under the traditional costing method and the activity-based costing system for each of the two products?
Correct Answer:

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