Question

Mustafa Enterprises makes a variety of products

Mustafa Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that ABC system are listed below: Activity Cost Pool Activity Measure Activity Rate Supporting assembly Direct labor-hours (DLHS) $ 7.50 per DLH Processing batches Number of batches 111.65 per batch Processing orders Number of orders $ 86.00 per order Serving customers Number of customers $2,737.00 per customer $ The cost of serving customers, $2,737.00 per customer, is the cost of serving a customer for one year. Dahle Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below: Number of units purchased Number of batches Number of orders Direct labor-hour requirement Selling price Direct materials cost Direct labor cost 800 units 16 batches 4 order 0.40 DLHS per unit $24.25 per unit $ 7.45 per unit $ 7.85 per unit

Answer 1

Total direct labor hours	320	=800*0.40
X Supporting Assembly activity rate	7.50
Supporting Assembly total cost	2400.00
$2,400.00 is correct option