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162. Machuga, Inc., manufactures and sells two products: Product C1 and Product M2. 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 C1 800 9.0 7,200
Product M2 700 11.0 7,700
Total direct labor-hours 14,900
The direct labor rate is $18.70 per DLH. The direct materials cost per unit is $297.00 for Product
C1 and $246.20 for Product M2
.
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 C1
Product M2
Total
Labor-related DLHs $558,452 7,200 7,700 14,900
Production orders orders 75,240 500 600 1,100
General factory MHs 886,410 4,400 4,600 9,000
$1,520,102
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 C1 would be closest to:
163. Machuga, Inc., manufactures and sells two products: Product C1 and Product M2. 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 C1 800 9.0 7,200
Product M2 700 11.0 7,700
Total direct labor-hours 14,900
The direct labor rate is $18.70 per DLH. The direct materials cost per unit is $297.00 for Product
C1 and $246.20 for Product M2
.
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 C1
Product M2
Total
Labor-related DLHs $558,452 7,200 7,700 14,900
Production orders orders 75,240 500 600 1,100
General factory MHs 886,410 4,400 4,600 9,000
$1,520,102
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 M2 would be closest to:
164. Machuga, Inc., manufactures and sells two products: Product C1 and Product M2. 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 C1 800 9.0 7,200
Product M2 700 11.0 7,700
Total direct labor-hours 14,900
The direct labor rate is $18.70 per DLH. The direct materials cost per unit is $297.00 for Product
C1 and $246.20 for Product M2
.
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 C1
Product M2
Total
Labor-related DLHs $558,452 7,200 7,700 14,900
Production orders orders 75,240 500 600 1,100
General factory MHs 886,410 4,400 4,600 9,000
$1,520,102
The overhead applied to each unit of Product C1 under activity-based costing is closest to:
3-329
165. Machuga, Inc., manufactures and sells two products: Product C1 and Product M2. 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 C1 800 9.0 7,200
Product M2 700 11.0 7,700
Total direct labor-hours 14,900
The direct labor rate is $18.70 per DLH. The direct materials cost per unit is $297.00 for Product
C1 and $246.20 for Product M2.
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 C1
Product M2
Total
Labor-related DLHs $558,452 7,200 7,700 14,900
Production orders orders 75,240 500 600 1,100
General factory MHs 886,410 4,400 4,600 9,000
$1,520,102
The overhead applied to each unit of Product M2 under activity-based costing is closest to:
3-332
166. Penegar, Inc., manufactures and sells two products: Product X7 and Product S4. 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 X7 200 9.0 1,800
Product S4 100 6.0 600
Total direct labor-hours 2,400
The direct labor rate is $21.60 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product X7 $128.70
Product S4 $174.10
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 X7
Product S4
Total
Labor-related DLHs $78,456 1,800 600 2,400
Machine setups setups 74,635 600 500 1,100
General factory MHs 98,091 4,200 3,900 8,100
$251,182
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 S4 would be closest to:
3-334
167. Penegar, Inc., manufactures and sells two products: Product X7 and Product S4. 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 X7 200 9.0 1,800
Product S4 100 6.0 600
Total direct labor-hours 2,400
The direct labor rate is $21.60 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product X7 $128.70
Product S4 $174.10
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
X7 Product
S4
Total
Labor-related DLHs $78,456 1,800 600
2,400
Machine setups setups 74,635 600 500
1,100
General factory MHs 98,091 4,200
3,900 8,100
$251,182
The overhead applied to each unit of Product S4 under activity-based costing is closest to:
3-337
168. Penegar, Inc., manufactures and sells two products: Product X7 and Product S4. 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 X7 200 9.0 1,800
Product S4 100 6.0 600
Total direct labor-hours
2,400
The direct labor rate is $21.60 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product X7 $128.70
Product S4 $174.10
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
X7 Product
S4
Total
Labor-related DLHs $78,456 1,800 600 2,400
Machine setups setups 74,635 600 500 1,100
General factory MHs 98,091 4,200 3,900 8,100
$251,182
Which of the following statements concerning the unit product cost of Product X7 is true?
