Ted's Manufacturing makes two products, B and C. They each take 2 direct labor hours and 2 machine hours to produce. A batch of Product B, however, uses twice the number of machine set-ups and requires 3 times as many materials requisitions as does Product C. Which of the following is most likely true?
a. The product cost of Product B will be higher under ABC than under traditional costing. b. The product cost of Product C will be higher under ABC costing than under traditional costingc. Traditional costing assigns a product cost that is too low to Product C. d. Traditional costing assigns a product cost that is too high to Product B.
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