Question

RE 36) Overturf, Inc., manufactures and sells two products: Product Y1 and Product Yo. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below. Product Y1 Product YO Total direct labor-hours Expected Production 300 500 Direct Labor- Hours Per Unit 6.0 9.0 Total Direct Labor Hours 1,800 4.500 6.300 The direct labor rate is $27.50 per DLH. The direct materials cost per unit is $106.10 for Product Y1 and $168.40 for Product YO. Cost The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Cost Activity Estimated Overhead Pools Measures Expected Activity Product Product Y YO Total Labor-related DLHs $ 151,263 1,800 4,500 6,300 Production orders orders 43,253 300 400 700 Order size MHs 863.478 4,900 5,000 9,900 $ 1,057,994 The overhead applied to each unit of Product Yl under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) A) S1,322.49 per unit B) $1,630.44 per unit C) $1,424.59 per unit D) $1,007.64 per unit

Answer 1

	Estimated Overhead cost	Total Activity	Cost per activity	Expected activity for Product Y1	Expected overhead cost for Y1
Labour Related	$    151,263.00	6300	$       24.01	1800	$      43,218.00
Production Orders	$      43,253.00	700	$       61.79	300	$      18,537.00
Order Size	$    863,478.00	9900	$       87.22	4900	$    427,378.00
Total	$ 1,057,994.00				$    489,133.00
Overhead applied = $489,133/300 units	$        1,630.44	option b is correct