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:
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:
3-228
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?
3-232
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:
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:
128. 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:
129. 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:
