Question

Fleurant, Inc., manufactures and sells two products: Product W2 and Product P8. 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 W2 600 6 3,600 Product P8 900 4 3,600 Total direct labor-hours 7,200 The direct labor rate is $42.10 per DLH. The direct materials cost per unit is $208.60 for Product W2 and $145.30 for Product P8. The company is considering adopting 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 W2 Product P8 Total Labor-related DLHs $ 223,576 3,600 3,600 7,200 Production orders orders 19,038 530 430 960 Order size MHs 333,386 3,930 3,730 7,660 $ 576,000 The overhead applied to each unit of Product W2 under activity-based costing is closest to:

Fleurant, Inc., manufactures and sells two products: Product W2 and Product P8. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected Direct Labor- Total Direct Production Hours Per Unit Labor-Hours Product W2 600 3,600 Product P8 900 3,600 Total direct labor-hours 7,200 The direct labor rate is $42.10 per DLH. The direct materials cost per unit is $208.60 for Product W2 and $145.30 for Product P8. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Overhead Activity Cost Pools Measures Cost Product W2 Product P8 Total Labor-related DLHS $223,576 3,600 3,600 7,200 Production orders orders 19,038 530 430 960 Order size MHS 333,386 3,930 3,730 7,660 $576,000 The overhead applied to each unit of Product W2 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice 0 O $283.59 per unit 0 $488.87 per unit 0 $480.00 per unit 0 $285.06 per unit

Answer 1

Solution: Activity cost pool Total cost Total activity Activity rate Product W2 Product W2 c=a/b d le=c*d Labor related 223576 7200 31.05 3,600.00 111780.00 production orders 19038 9 60 19.83 530.00 10509.90 order size 333386 7660 43.52 3,930.00 171033.60 Total cost assinged 293323.50 / units Overapplied to each unit 488.87 600