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 Total Labor- Direct Expected Hours Per Labor- Production Unit Hours 1,200 2.0 2,400 400 1.0 2,800 Product 31 Product A7 Total direct labor-hours 400 The direct labor rate is $23.60 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $248.00 $257.00 Product El Product A7 The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Cost Pools Labor-related Machine setups Order size Activity Neasures DLHS setups MHS Estimated Expected Activity Overhead Cost Product El Product A7 Total $ 130,500 2,400 400 2,800 61,530 1,300 490 1,700 962, 370 3,300 3,100 6,400 $1,154,400 The total overhead applied to Product E1 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice O $496,221 $547,376 Oo oo O $655,132 $1,154,399

Answer 1

Calculate overhead applied to Product E1

	Product E1
Labor related (130500/2800*2400)	111864
Machine setup (61530/1700*1300)	47047
Order size (962370/6400*3300)	496221
Total	655132

So answer is c) $655132