130. 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:
131. 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:
132. 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:
133. 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:
134. 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:
135. 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:
136. Adams Company has two products: A and B. The annual production and sales of Product
A is 500 units and of Product B is 900 units. The company has traditionally used direct labor–
hours (DLHs) as the basis for applying all manufacturing overhead to products. Product A
requires 0.4 direct labor-hours per unit and Product B requires 0.5 direct labor-hours per unit.
The total estimated overhead for next period is $67,522.
The company is considering switching to an activity-based costing system for the purpose of
computing unit product costs for external reports. The new activity-based costing system would
have three overhead activity cost pools-Activity 1, Activity 2, and General Factory-with estimated
overhead costs and expected activity as follows:
Expected Activity
Activity Cost Pools Estimated Overhead Costs Product A Product B
Total
Activity 1 $6,915 300 200 500
Activity 2 24,948 2,100 700 2,800
General Factory 35,659 200 450 650
Total $67,522
(Note: The General Factory activity cost pool‘s costs are allocated on the basis of direct labor–
hours.)
The predetermined overhead rate under the traditional costing system is closest to:
137. Adams Company has two products: A and B. The annual production and sales of Product
A is 500 units and of Product B is 900 units. The company has traditionally used direct labor–
hours (DLHs) as the basis for applying all manufacturing overhead to products. Product A
requires 0.4 direct labor-hours per unit and Product B requires 0.5 direct labor-hours per unit.
The total estimated overhead for next period is $67,522.
The company is considering switching to an activity-based costing system for the purpose of
computing unit product costs for external reports. The new activity-based costing system would
have three overhead activity cost pools-Activity 1, Activity 2, and General Factory-with estimated
overhead costs and expected activity as follows:
Expected Activity
Activity Cost Pools Estimated Overhead Costs Product A Product B
Total
Activity 1 $6,915 300 200 500
Activity 2 24,948 2,100 700 2,800
General Factory 35,659 200 450 650
Total $67,522
(Note: The General Factory activity cost pool‘s costs are allocated on the basis of direct labor–
hours.)
The overhead cost per unit of Product A under the traditional costing system is closest to:
138. Adams Company has two products: A and B. The annual production and sales of Product
A is 500 units and of Product B is 900 units. The company has traditionally used direct labor–
hours (DLHs) as the basis for applying all manufacturing overhead to products. Product A
requires 0.4 direct labor-hours per unit and Product B requires 0.5 direct labor-hours per unit.
The total estimated overhead for next period is $67,522.
The company is considering switching to an activity-based costing system for the purpose of
computing unit product costs for external reports. The new activity-based costing system would
have three overhead activity cost pools-Activity 1, Activity 2, and General Factory-with estimated
overhead costs and expected activity as follows:
Expected Activity
Activity Cost Pools Estimated Overhead Costs Product A Product B
Total
Activity 1 $6,915 300 200 500
Activity 2 24,948 2,100 700 2,800
General Factory 35,659 200 450 650
Total $67,522
(Note: The General Factory activity cost pool‘s costs are allocated on the basis of direct labor–
hours.)
The predetermined overhead rate (i.e., activity rate) for Activity 1 under the activity-based
costing system is closest to: