3-563
145.
Punches, Inc., manufactures and sells two products: Product H7 and Product Y2. 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 H7
100
6.0
600
Product Y2
900
4.0
3,600
Total direct labor-hours
4,200
The direct labor rate is $17.80 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product H7
$132.50
Product Y2
$266.40
The company is considering adopting an activity-based costing system with the following
activity cost pools, activity measures, and expected activity:
Expected Activity
Activity Cost Pools
Activity Measures
Estimated
Overhead Cost
Product
H7
Product
Y2
Total
Labor-related
DLHs
$205,296
600
3,600
4,200
Machine setups
setups
38,380
400
600
1,000
General factory
MHs
528,198
3,400
3,200
6,600
$771,874
The overhead applied to each unit of Product Y2 under activity-based costing is closest
to:
3-565
3-566
146.
Punches, Inc., manufactures and sells two products: Product H7 and Product Y2. 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 H7
100
6.0
600
Product Y2
900
4.0
3,600
Total direct labor-hours
4,200
The direct labor rate is $17.80 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product H7
$132.50
Product Y2
$266.40
The company is considering adopting an activity-based costing system with the following
activity cost pools, activity measures, and expected activity:
Expected Activity
Activity Cost Pools
Activity Measures
Estimated
Overhead Cost
Product
H7
Product
Y2
Total
Labor-related
DLHs
$205,296
600
3,600
4,200
Machine setups
setups
38,380
400
600
1,000
General factory
MHs
528,198
3,400
3,200
6,600
$771,874
Which of the following statements concerning the unit product cost of Product H7 is
true?
3-569
147.
Mcleese, Inc., manufactures and sells two products: Product I6 and Product L1. 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 I6
800
8.0
6,400
Product L1
700
5.0
3,500
Product L1
Machine setups
General factory
3-571
traditional costing method, the predetermined overhead rate would be closest to:
3-572
148.
Mcleese, Inc., manufactures and sells two products: Product I6 and Product L1. 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 I6
800
8.0
6,400
Product L1
700
5.0
3,500
Total direct labor-
hours
9,900
The direct labor rate is $26.60 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product I6
$255.60
Product L1
$196.80
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 I6
Product L1
Total
Labor-related
DLHs
$215,622
6,400
3,500
9,900
Machine setups
setups
69,938
600
500
1,100
General factory
MHs
382,275
3,800
3,700
7,500
$667,835
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 L1 would be
3-573
closest to:
149.
Mcleese, Inc., manufactures and sells two products: Product I6 and Product L1. 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 I6
800
8.0
6,400
Product L1
700
5.0
3,500
Product I6
Machine setups
General factory
3-575
3-576
150.
Mcleese, Inc., manufactures and sells two products: Product I6 and Product L1. 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 I6
800
8.0
6,400
Product L1
700
5.0
3,500
Total direct labor-
hours
9,900
The direct labor rate is $26.60 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product I6
$255.60
Product L1
$196.80
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 I6
Product L1
Total
Labor-related
DLHs
$215,622
6,400
3,500
9,900
Machine setups
setups
69,938
600
500
1,100
General factory
MHs
382,275
3,800
3,700
7,500
$667,835
The overhead applied to each unit of Product L1 under activity-based costing is closest
to:
3-577
3-578
3-579
151.
Boutet, Inc., manufactures and sells two products: Product G5 and Product U1. 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 G5
800
5.0
4,000
Product U1
800
3.0
2,400
Total direct labor-
hours
6,400
The direct labor rate is $21.10 per DLH. The direct materials cost per unit is $241.40 for
Product G5 and $283.80 for Product U1
.
The company is considering adopting an activity-based costing system with the following
activity cost pools, activity measures, and expected activity:
Expected Activity
Activity Cost Pools
Activity Measures
Estimated
Overhead Cost
Product
G5
Product
U1
Total
Labor-related
DLHs
$200,640
4,000
2,400
6,400
Production orders
orders
14,959
400
300
700
General factory
MHs
610,416
4,200
3,900
8,100
$826,015
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 G5 would be
closest to:
3-580
3-581
152.
Boutet, Inc., manufactures and sells two products: Product G5 and Product U1. 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 G5
800
5.0
4,000
Product U1
800
3.0
2,400
Total direct labor-
hours
6,400
The direct labor rate is $21.10 per DLH. The direct materials cost per unit is $241.40 for
Product G5 and $283.80 for Product U1
.
The company is considering adopting an activity-based costing system with the following
activity cost pools, activity measures, and expected activity:
Expected Activity
Activity Cost Pools
Activity Measures
Estimated
Overhead Cost
Product
G5
Product
U1
Total
Labor-related
DLHs
$200,640
4,000
2,400
6,400
Production orders
orders
14,959
400
300
700
General factory
MHs
610,416
4,200
3,900
8,100
$826,015
The overhead applied to each unit of Product G5 under activity-based costing is closest
to:
3-582