Question

Help Save & Exit Submit Chhom, Inc., manufactures and sells two products: Product F9 and Product U4. 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 400 800 Direct Labor- Hours Per Unit Product F9 Product 14 Total direct labor-hours Total Direct Labor-Hours 3,200 3,200 6,400 The direct labor rate is $24.20 per DLH. The direct materials cost per unit is $223 for Product F9 and $287 for Product 14. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Cost Pools Labor-related Production orders Order size Activity Measures DLHS orders MHS Estimated Expected Activity Overhead Cost Product F9 Product U4 Total $ 32,400 3,200 3,200 6,400 51,440 500 800 1,300 104,8303,500 3,100 6,600 $188,670 If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product U4 would be closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice < Prex 4 of 20 ! MacBook Air

Answer 1

Solution:

Total overhead assigned to Product U4 = total overhead / total direct labor hours* labor hours of Product U4

= $188670 / 6400 *3200 = $94,335

Overhead assigned to each unit of Product U4 = $94335/ units of product U4

= $94335/ 800 = $117.92 per unit

Hence first option is correct.