Question

Product costs are computed by:

A) averaging the plantwide cost driver rate with the cost driver for each product.
B) multiplying the cost driver rate by the number of units of the cost driver in each product.
C) adding the cost driver rates of all products.
D) dividing the cost driver rate by the number of units of the cost driver in each product.

Answer 1

Answer: Option (B) is correct.

Step-by-step explanation:

Product costs are the that are incurred during the production of a product. Various costs are involved in this product cost such as direct labor cost, consumable production supplies, direct material, etc. It is calculated by multiplying the cost driver rate to the number of the units of cost driver that are used in the production of each product.