Company A manufactures three smartphones. Company A currently operates a traditional absorption costing system, but has decided to use an activity based costing (ABC) system on a trial basis for its procurement operation. A time-based cost driver is used to charge the procurement costs to the smartphones under the ABC system. The following unit manufacturing costs have been determined using both traditional absorption costing and activity based costing:

Place each of the following statements in a grey cell, against the product to which it is most likely to relate:

Transcribed Image Text:

Traditional absorption Activity Based Costing Smartphone Type 1 Smartphone Type 2 Smartphone Type 3 $90 $108 $102 $104 $95 $85