Question

Help Save & Edt Mckenny, Inc., manufactures and sells two products Product P9 and Product X2. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below Hours Direct Direct Labor- Hours Expected Per Production Unit 2006. 0 100 5.0 Total Direct Labor Hours 1 .200 500 1,700 Product pg Product X2 Total direct labor-hours The direct labor rate is $28.20 per DLH. The direct materials cost per unit is $140.50 for Product P9 and 107.50 for Product X2 The company is considering adopting an activity based costing system with the following activity cost pools, activity measures, and expected activity Activity Measures DLHS orders Estimated Overhead Cost 545,084 119,064 459,818 $624,866 Expected Activity Product P9 Product X2 1.200 Activity Cost Pools Labor-related Production orders Order size See Total 1,700 1,300 6,100 600 7de 3,200 2,900 < Prev 5 of 10 !!! Next > re to search

Answer 1

Answer $2,205.42 per unit $ Total Overhead cost Total Direct labour hours 624,866 1700 Overhead cost per Direct labour hour = $ 624866 / 1700 = $367.57 No. of direct labour hours required for each Product P9 = 6 DLH Overhead assigned to each unit of Product P9 = $367.57 *6 = $ 2,205.42