Question

Seved Help Save& Exit Submit 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 Direct Total Labor- Direct Expected Labor- Hours Per 06 Production Unit Hours Product E1 900 2.0 1,800 Product A7 600 1.0 600 Total direct labor-hours 2,400 The direct labor rate is $24.10 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit Product E1 $282.00 Product A7 $204.00 The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity Expected Activity Estimated Activity Overhead Activity Cost Pools Labor-related Product El Product A7 Total Cost Measures 2,400 1,800 600 132,400 62,430 976,450 DLHB 600 Machine setups 1,000 1,600 setups 7,100 3,700 3,400 Order size MHs $1,171,280 1 of 20 Next> Prev MacBook Air

Answer 1

Activity rate for the Order Size activity under activity-based costing = Estimated overhead cost/Total expected activity = $976,450/7.100 = $137.53 per MH Thus, the correct option is $137.53 per MH'.