Question

Snavely, Inc., manufactures and sells two products: Product E1 and Product A7. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected Production Direct Labor-Hours Per Unit Total Direct Labor-Hours Product E1 1,000 10.0 10,000 Product A7 200 5.0 1,000 Total direct labor-hours 11,000 The direct labor rate is $25.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit Product E1 $233.00 Product A7 $200.00 The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product E1 Product A7 Total Labor-related DLHs $ 135,700 10,000 1,000 11,000 Machine setups setups 64,000 1,100 200 1,300 Order size MHs 1,001,010 2,800 3,200 6,000 $ 1,200,710 The total overhead applied to Product E1 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

Snavely, Inc., manufactures and sells two products: Product El and Product A7. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Direct Total Labor- Direct Expected Hours Per Labor- Production Unit Hours 1,000 10.0 10.000 200 5.0 1,000 11,000 Product El Product A7 Total direct labor-hours The direct labor rate is $25.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $233.00 $200.00 Product El Product A7 The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Cost Pools Labor-related Machine setups Order size Activity Measures DLHS setups Estimated Expected Activity Overhead Cost Product El Product A7 Total $ 135,700 10,000 1,000 11,000 64,000 1,100 200 1,300 1,001,010 2,800 3,200 6,000 $1,200, 710 MHS The total overhead applied to Product E1 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice 0 $1,200,779 0 $644,705 0 $2,007,870 0 $467152

Answer 1

Solution: $644,705

Working:

Activity Cost Pools	Estimated OH Cost	Total Expected Activity	Activity rate
	(a)	(b)	(a) / (b)
Labor-related	135,700	11,000	12.34
Production orders	64,000	1,300	49.23
Order size	1,001,010	6,000	166.84
PRODUCT E1
Activity Cost Pools	Product E1	Activity rate	Amount
	(a)	(b)	(a) * (b)
Labor-related	10,000	12.34	123363.64
Production orders	1,100	49.23	54153.85
Order size	2,800	166.84	467138.00
			644655.48

Choosing the nearest option