Question: Cullumber Inc. is currently comparing a potential implementation of Activity-Based Costing (ABC) with its current use of traditional costing and comparing the results. Cullumber creates
Cullumber Inc. is currently comparing a potential implementation of Activity-Based Costing (ABC) with its current use of traditional costing and comparing the results. Cullumber creates two products: Candy Bars, 59800 units; and lollipops, 82100 units. Under ABC, Manufacturing Overhead (MOH) is allocated at $42977.44 to candy bars and $32681.90 to lollipops. Under traditional costing, MOH is allocated at $47707.87 to candy bars and $27951.47 to lollipops. Which of the following statements is correct? Unit cost will be higher for lollipops under traditional costing than ABC. Unit cost will be lower for candy bars under ABC than traditional costing. Unit cost will be lower for candy bars under traditional costing than ABC. Unit cost will be lower for lollipops under ABC than traditional costing
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