155. Paolello, Inc., manufactures and sells two products: Product P5 and Product N5. 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 P5 400 8.0 3,200
Product N5 300 11.0 3,300
Total direct labor-hours 6,500
The direct labor rate is $24.60 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product P5 $111.60
Product N5 $131.70
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 P5
Product N5
Total
Labor-related DLHs $80,210 3,200 3,300 6,500
Machine setups setups 70,776 400 500 900
General factory MHs 283,104 3,700 3,500 7,200
$434,090
The overhead applied to each unit of Product P5 under activity-based costing is closest to:
3-305
156. Paolello, Inc., manufactures and sells two products: Product P5 and Product N5. 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 P5 400 8.0 3,200
Product N5 300 11.0 3,300
Total direct labor-hours 6,500
The direct labor rate is $24.60 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product P5 $111.60
Product N5 $131.70
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 P5
Product N5
Total
Labor-related DLHs $80,210 3,200 3,300 6,500
Machine setups setups 70,776 400 500 900
General factory MHs 283,104 3,700 3,500 7,200
$434,090
Which of the following statements concerning the unit product cost of Product N5 is true?
3-307
3-309
157. Accurso, Inc., manufactures and sells two products: Product J9 and Product S5. 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 J9 400 6.0 2,400
Product S5 600 3.0 1,800
Total direct labor-hours
4,200
The direct labor rate is $22.50 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product J9 $111.40
Product S5 $275.20
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 J9
Product S5
Total
Labor-related DLHs $121,548 2,400 1,800 4,200
Machine setups setups 37,170 600 800 1,400
General factory MHs 385,848 4,700 4,500 9,200
$544,566
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:
3-311
158. Accurso, Inc., manufactures and sells two products: Product J9 and Product S5. 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 J9 400 6.0 2,400
Product S5 600 3.0 1,800
Total direct labor-hours 4,200
The direct labor rate is $22.50 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product J9 $111.40
Product S5 $275.20
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 J9
Product S5
Total
Labor-related DLHs $121,548 2,400 1,800 4,200
Machine setups setups 37,170 600 800 1,400
General factory MHs 385,848 4,700 4,500 9,200
$544,566
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 J9 would be closest to:
3-313
159. Accurso, Inc., manufactures and sells two products: Product J9 and Product S5. 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 J9 400 6.0 2,400
Product S5 600 3.0 1,800
Total direct labor-hours 4,200
The direct labor rate is $22.50 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product J9 $111.40
Product S5 $275.20
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 J9
Product S5
Total
Labor-related DLHs $121,548 2,400 1,800 4,200
Machine setups setups 37,170 600 800 1,400
General factory MHs 385,848 4,700 4,500 9,200
$544,566
The activity rate for the Machine Setups activity cost pool under activity-based costing is closest
to:
160. Accurso, Inc., manufactures and sells two products: Product J9 and Product S5. 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 J9 400 6.0 2,400
Product S5 600 3.0 1,800
Total direct labor-hours 4,200
The direct labor rate is $22.50 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product J9 $111.40
Product S5 $275.20
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 J9
Product S5
Total
Labor-related DLHs $121,548 2,400 1,800 4,200
Machine setups setups 37,170 600 800 1,400
General factory MHs 385,848 4,700 4,500 9,200
$544,566
The overhead applied to each unit of Product J9 under activity-based costing is closest to:
3-318
161. Accurso, Inc., manufactures and sells two products: Product J9 and Product S5. 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 J9 400 6.0 2,400
Product S5 600 3.0 1,800
Total direct labor-hours 4,200
The direct labor rate is $22.50 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product J9 $111.40
Product S5 $275.20
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 J9
Product S5
Total
Labor-related DLHs $121,548 2,400 1,800 4,200
Machine setups setups 37,170 600 800 1,400
General factory MHs 385,848 4,700 4,500 9,200
$544,566
Which of the following statements concerning the unit product cost of Product S5 is true?
