Question

Olmo, Inc., manufactures and sells two products: Product K0 and Product H9. The annual production and sales of Product of K0 is 700 units and of Product H9 is 700 units. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

Activity Cost Pools	Activity Measures	Estimated Overhead Cost			Expected Activity
					Product K0	Product H9	Total
Labor-related	DLHs	$	549,308		5,600	2,800	8,400
Production orders	orders		52,319		800	400	1,200
Order size	MHs		834,916		3,000	3,300	6,300
		$	1,436,543

The overhead applied to each unit of Product H9 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

Multiple Choice

A. $261.56 per unit

B. $911.26 per unit

C. $624.78 per unit

D. $513.05 per unit

Answer 1

Calculate overhead applied of each unit

	Product H9
Labor-related	549308/8400*2800 = 183092
Production order	52319/1200*400 = 17440
Order size	834916/6300*3300 = 437349
Total	637881
Unit	700
Overhead cost per unit	911.26

So answer is b) $911.26