Question

newconnect.mheducation.com/llow/connect. n l Help Save & Exit Submit Fleurant, Inc., manufactures and sells two products: Product W2 and Product P8. 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 300 600 Product W2 Product P8 Total direct labor-hours Total Direct Labor-Hours 1,800 1,800 3,600 The direct labor rate is $30.10 per DLH. The direct materials cost per unit is $196,60 for Product W2 and $133.30 for Product P8. The company is considering adopting an activity based costing system with the following activity cost pools, activity measures, and expected activity: Expected Activity Activity Cost Pools Labor-related Production orders Order size Estimated Activity Overhead Measures Cost DLHS $ 211,576 orders 17,838 238,586 $ 468,000 Product W2 Product P8 1,800 1,800 410 3,810 3,610 Total 3,600 720 7,420 310 The overhead applied to each unit of Product W2 under activity based costing is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice < Prev 7 of 20 Next

Answer 1

OPTION: $794.79 per unit

EXPLANATION:

Activity rate = estimated overhead cost/total expected activity

Overhead applied = activity rate x expected activity

overhead applied per unit = total overhead applied/expected production units

for product W2:

Activity cost pools	activity rate	expected activity	overhead applied
Labour related	$211576/3600 = $58.77	1800	$105786
Production orders	$17838/720 = $24.76	410	$10151.60
Order size	$238586/7420 = $32.15	3810	$122491.50
		Total overhead applied =	$238429.10
		Expected production units =	$300
		Overhead applied per unit =	$794.76