Question

Olmo, Inc., manufactures and sells two products: Product K0 and Product H9. The annual production and sales of Product of K0 is 1,100 units and of Product H9 is 1,100 units. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

Activity Cost Pools	Activity Measures	Estimated Overhead Cost			Expected Activity
					Product K0	Product H9	Total
Labor-related	DLHs	$	551,008		8,800	4,400	13,200
Production orders	orders		54,019		1,200	200	1,400
Order size	MHs		836,616		3,500	2,700	6,200
		$	1,441,643

The overhead applied to each unit of Product H9 under activity-based costing is closest to:

Answer 1

Answer

--Overhead applied to each unit of Product H9 is CLOSEST to $ 505.20

--Working

Product H9
Labor Related	$183,669.33	(551008/13200)*4400
Product orders	$7,717.00	(54019/1400)*200
Order Size	$364,332.77	(836616/6200)*2700
Total Overhead applied	$555,719.11
No of units	1100
Overhead applief to each unit	$505.20	Answer [$555719.11 / 1100 units]