3-503
If the company allocates all of its overhead based on direct labor-hours using its
traditional costing method, the predetermined overhead rate would be closest to:
3-504
120.
Serva, Inc., manufactures and sells two products: Product R4 and Product N4. Data
concerning the expected production of each product and the expected total direct labor-
hours (DLHs) required to produce that output appear below:
Expected
Production
Total Direct Labor-
Hours
Product R4
800
4,800
Product N4
300
900
Total direct labor-
hours
5,700
The direct labor rate is $24.70 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product R4
$202.10
Product N4
$289.90
The company is considering adopting an activity-based costing system with the following
activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product R4
Product N4
Total
Labor-related
DLHs
$86,811
4,800
900
5,700
Machine setups
setups
29,000
400
600
1,000
General factory
MHs
122,520
3,100
2,900
6,000
$238,331
If the company allocates all of its overhead based on direct labor-hours using its
traditional costing method, the overhead assigned to each unit of Product R4 would be
3-505
closest to:
3-506
121.
Serva, Inc., manufactures and sells two products: Product R4 and Product N4. Data
concerning the expected production of each product and the expected total direct labor-
hours (DLHs) required to produce that output appear below:
Expected
Production
Direct Labor-Hours Per
Unit
Total Direct Labor-
Hours
Product R4
800
6.0
4,800
Product N4
300
3.0
900
Total direct labor-
hours
5,700
The direct labor rate is $24.70 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product R4
$202.10
Product N4
$289.90
The company is considering adopting an activity-based costing system with the following
activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product R4
Product N4
Total
Labor-related
DLHs
$86,811
4,800
900
5,700
Machine setups
setups
29,000
400
600
1,000
General factory
MHs
122,520
3,100
2,900
6,000
$238,331
The unit product cost of Product N4 under the company’s traditional costing method in
which all overhead is allocated on the basis of direct labor-hours is closest to:
3-507
3-508
122.
Serva, Inc., manufactures and sells two products: Product R4 and Product N4. Data
concerning the expected production of each product and the expected total direct labor-
hours (DLHs) required to produce that output appear below:
Expected
Production
Total Direct Labor-
Hours
Product R4
800
4,800
Product N4
300
900
Total direct labor-
hours
5,700
The direct labor rate is $24.70 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product R4
$202.10
Product N4
$289.90
The company is considering adopting an activity-based costing system with the following
activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product R4
Product N4
Total
Labor-related
DLHs
$86,811
4,800
900
5,700
Machine setups
setups
29,000
400
600
1,000
General factory
MHs
122,520
3,100
2,900
6,000
$238,331
The activity rate for the Labor-Related activity cost pool under activity-based costing is
closest to:
3-509
3-510
123.
Serva, Inc., manufactures and sells two products: Product R4 and Product N4. Data
concerning the expected production of each product and the expected total direct labor-
hours (DLHs) required to produce that output appear below:
Expected
Production
Direct Labor-Hours Per
Unit
Total Direct Labor-
Hours
Product R4
800
6.0
4,800
Product N4
300
3.0
900
Total direct labor-
hours
5,700
The direct labor rate is $24.70 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product R4
$202.10
Product N4
$289.90
The company is considering adopting an activity-based costing system with the following
activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product R4
Product N4
Total
Labor-related
DLHs
$86,811
4,800
900
5,700
Machine setups
setups
29,000
400
600
1,000
General factory
MHs
122,520
3,100
2,900
6,000
$238,331
The overhead applied to each unit of Product N4 under activity-based costing is closest
to:
3-511
3-512
3-513
124.
Serva, Inc., manufactures and sells two products: Product R4 and Product N4. Data
concerning the expected production of each product and the expected total direct labor-
hours (DLHs) required to produce that output appear below:
Expected
Production
Direct Labor-Hours Per
Unit
Total Direct Labor-
Hours
Product R4
800
6.0
4,800
Product N4
300
3.0
900
Total direct labor-
hours
5,700
The direct labor rate is $24.70 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product R4
$202.10
Product N4
$289.90
The company is considering adopting an activity-based costing system with the following
activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product R4
Product N4
Total
Labor-related
DLHs
$86,811
4,800
900
5,700
Machine setups
setups
29,000
400
600
1,000
General factory
MHs
122,520
3,100
2,900
6,000
$238,331
The unit product cost of Product R4 under activity-based costing is closest to:
3-514
3-515
3-516
125.
Serva, Inc., manufactures and sells two products: Product R4 and Product N4. Data
concerning the expected production of each product and the expected total direct labor-
hours (DLHs) required to produce that output appear below:
Expected
Production
Direct Labor-Hours Per
Unit
Total Direct Labor-
Hours
Product R4
800
6.0
4,800
Product N4
300
3.0
900
Total direct labor-
hours
5,700
The direct labor rate is $24.70 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product R4
$202.10
Product N4
$289.90
The company is considering adopting an activity-based costing system with the following
activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product R4
Product N4
Total
Labor-related
DLHs
$86,811
4,800
900
5,700
Machine setups
setups
29,000
400
600
1,000
General factory
MHs
122,520
3,100
2,900
6,000
$238,331
Which of the following statements concerning the unit product cost of Product N4 is
true?
3-517
3-520
126.
Masiclat, Inc., manufactures and sells two products: Product K2 and Product O8. Data
concerning the expected production of each product and the expected total direct labor-
hours (DLHs) required to produce that output appear below:
Expected
Production
Direct Labor-Hours Per
Unit
Total Direct Labor-
Hours
Product K2
500
9.0
4,500
Product O8
700
12.0
8,400
Total direct labor-
hours
12,900
The direct labor rate is $21.10 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product K2
$201.30
Product O8
$298.90
The company is considering adopting an activity-based costing system with the following
activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product K2
Product O8
Total
Labor-related
DLHs
$426,861
4,500
8,400
12,900
Machine setups
setups
59,328
400
500
900
General factory
MHs
442,085
4,300
4,200
8,500
$928,274
The unit product cost of Product K2 under the company’s traditional costing method in
which all overhead is allocated on the basis of direct labor-hours is closest to:
3-521
3-522
127.
Masiclat, Inc., manufactures and sells two products: Product K2 and Product O8. Data
concerning the expected production of each product and the expected total direct labor-
hours (DLHs) required to produce that output appear below:
Expected
Production
Direct Labor-Hours Per
Unit
Total Direct Labor-
Hours
Product K2
500
9.0
4,500
Product O8
700
12.0
8,400
Total direct labor-
hours
12,900
The direct labor rate is $21.10 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product K2
$201.30
Product O8
$298.90
The company is considering adopting an activity-based costing system with the following
activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product K2
Product O8
Total
Labor-related
DLHs
$426,861
4,500
8,400
12,900
Machine setups
setups
59,328
400
500
900
General factory
MHs
442,085
4,300
4,200
8,500
$928,274
The unit product cost of Product O8 under the company’s traditional costing method in
which all overhead is allocated on the basis of direct labor-hours is closest to: