3-523
3-524
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 activity-based costing is closest to:
3-526
3-527
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 activity-based costing is closest to:
3-528
3-529
3-530
Hewett, Inc., manufactures and sells two products: Product E7 and Product U7. 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 E7
1,000
7.0
7,000
Product U7
200
8.0
1,600
Total direct labor-
hours
8,600
The direct labor rate is $29.50 per DLH. The direct materials cost per unit is $164.10 for
Product E7 and $289.50 for Product U7
.
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 E7
Product U7
Total
Labor-related
DLHs
$380,120
7,000
1,600
8,600
Production orders
orders
58,422
300
400
700
General factory
MHs
369,754
5,000
4,800
9,800
$808,296
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:
3-531
3-532
Hewett, Inc., manufactures and sells two products: Product E7 and Product U7. 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 E7
1,000
7.0
7,000
Product U7
200
8.0
1,600
Total direct labor-
hours
8,600
The direct labor rate is $29.50 per DLH. The direct materials cost per unit is $164.10 for
Product E7 and $289.50 for Product U7
.
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 E7
Product U7
Total
Labor-related
DLHs
$380,120
7,000
1,600
8,600
Production orders
orders
58,422
300
400
700
General factory
MHs
369,754
5,000
4,800
9,800
$808,296
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 U7 would be
closest to:
3-533
3-534
Hewett, Inc., manufactures and sells two products: Product E7 and Product U7. 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 E7
1,000
7.0
7,000
Product U7
200
8.0
1,600
Total direct labor-
hours
8,600
The direct labor rate is $29.50 per DLH. The direct materials cost per unit is $164.10 for
Product E7 and $289.50 for Product U7
.
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 E7
Product U7
Total
Labor-related
DLHs
$380,120
7,000
1,600
8,600
Production orders
orders
58,422
300
400
700
General factory
MHs
369,754
5,000
4,800
9,800
$808,296
The unit product cost of Product E7 under the company’s traditional costing method in
which all overhead is allocated on the basis of direct labor-hours is closest to:
3-535
3-536
Hewett, Inc., manufactures and sells two products: Product E7 and Product U7. 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 E7
1,000
7.0
7,000
Product U7
200
8.0
1,600
Total direct labor-
hours
8,600
The direct labor rate is $29.50 per DLH. The direct materials cost per unit is $164.10 for
Product E7 and $289.50 for Product U7
.
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 E7
Product U7
Total
Labor-related
DLHs
$380,120
7,000
1,600
8,600
Production orders
orders
58,422
300
400
700
General factory
MHs
369,754
5,000
4,800
9,800
$808,296
The activity rate for the Production Orders activity cost pool under activity-based costing
is closest to:
3-537
3-538
Hewett, Inc., manufactures and sells two products: Product E7 and Product U7. 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 E7
1,000
7.0
7,000
Product U7
200
8.0
1,600
Total direct labor-
hours
8,600
The direct labor rate is $29.50 per DLH. The direct materials cost per unit is $164.10 for
Product E7 and $289.50 for Product U7
.
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 E7
Product U7
Total
Labor-related
DLHs
$380,120
7,000
1,600
8,600
Production orders
orders
58,422
300
400
700
General factory
MHs
369,754
5,000
4,800
9,800
$808,296
The overhead applied to each unit of Product E7 under activity-based costing is closest
to:
3-539
3-540
3-541
Hewett, Inc., manufactures and sells two products: Product E7 and Product U7. 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 E7
1,000
7.0
7,000
Product U7
200
8.0
1,600
Total direct labor-
hours
8,600
The direct labor rate is $29.50 per DLH. The direct materials cost per unit is $164.10 for
Product E7 and $289.50 for Product U7
.
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 E7
Product U7
Total
Labor-related
DLHs
$380,120
7,000
1,600
8,600
Production orders
orders
58,422
300
400
700
General factory
MHs
369,754
5,000
4,800
9,800
$808,296
The unit product cost of Product U7 under activity-based costing is closest to: