Question

Hello could someone please help me answer this question

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 Labor-Hours Per Unit Expected Production 1,000 300 Total Direct Labor- Hours 4,000 600 4,600 4.0 Product E1 Product A7 Total direct labor-hours 2.0 The direct labor rate is $25.20 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $296.00 $203.00 Product E1 Product A7 The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Expected Activity Activity Cost Pools Labor-related Machine setups Order size Activity Measures DLHS setups MHS Estimated Overhead Cost $ 145,000 68,360 1,069,190 $1,282,550 Product E1 4,000 1,100 2,700 Product AZ 600 300 3,100 Total 4,600 1,400 5,800 The total overhead applied to Product E1 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $1,282.526 $677,511 $1,003,342 $497,718

Answer 1

Correct answer------------$677,511

Working

Cost assigned to Product E1
Activity name	Activity Rates	Activity	ABC Cost
	(A)	(B)	(A x B)
Labor related	$           31.52	4,000.00	$ 126080.00
Machine setup	$           48.83	1,100.00	$ 53,713.00
Order size	$        184.34	2,700.00	$ 497718.00
Total Overheads assigned			$ 677511.00

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Calculation of Activity rates
Activity Cost Pool	Activity driver	Overhead Cost (A)	Expected Activity (B)	Activity rate (A/B)
Labor related	Number of DLH	$ 145,000	4600	$             31.52	Per DLH
Machine setup	Number of setup	$ 68,360	1400	$             48.83	Per setup
Order size	Number of MH	$ 1,069,190	5800	$          184.34	Per MH