Question

Olmo, Inc., manufactures and sells two products: Product KO and Product H9. The annual production and sales of Product of KO is 1,100 units and of Product H9 is 1100 units. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Cost Pools Labor-related Production orders Order size Activity Estimated Expected Activity Measures Overhead Cost Product ko Product 19 DLHS $ 550,808 2,200 1,100 orders 53,819 1,200 300 MHS 836, 416 2,800 3,700 $1,441,043 Total 3,300 1,500 6,500 The overhead applied to each unit of Product KO under activity-based costing is closest to (Round your intermediate calculations to 2 decimal places.)

these are the multiple questions associated with the question

Answer 1

Answer: $700.51 per unit

Working:

Activity cost pools	Estimated overhead cost	Total activity [units]	Overhead rate
Labor related	$                                                           550,808	3300	$                    166.91	550808/3300
Production orders	$                                                              53,819	1500	$                      35.88	53819/1500
Order size	$                                                           836,416	6500	$                    128.68	836416/6500
Activity cost pools	Expected activity of product K0 [units]	overhead rate	Overhead applies
Labor related	2200	$                                          166.91	$                 367,205	2200*166.91
Production orders	1200	$                                            35.88	$                    43,055	1200*35.88
Order size	2800	$                                          128.68	$                 360,302	2800*128.68
Total			$                 770,563

Overhead cost applied to each unit of product K0 = $ 770,563/1100 = $ 700.51 per unit