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37. Marchan, Inc., manufactures and sells two products: Product K1 and Product S6. 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 K1 500 8.0 4,000
Product S6 100 5.0 500
Total direct labor-hours
4,500
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 K1 Product S6 Total
Labor-related DLHs $127,485 4,000 500 4,500
Production orders orders 27,820 400 600 1,000
General factory MHs 452,868 4,000 3,800 7,800
$608,173
The activity rate for the General Factory activity cost pool under activity-based costing is closest
to:
38. Pedrozo, Inc., manufactures and sells two products: Product R9 and Product O3. 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 R9
Product O3
Total
Labor-related DLHs $197,540 4,000 10,000 14,000
Product testing tests 32,760 400 300 700
General factory MHs 567,758 3,300 3,400 6,700
$798,058
The activity rate for the Labor-Related activity cost pool under activity-based costing is closest
to:
39. Tesh, Inc., manufactures and sells two products: Product P9 and Product I9. 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 P9 200 7.0 1,400
Product I9 400 6.0 2,400
Total direct labor-hours 3,800
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 P9
Product I9 Total
Labor-related DLHs $71,136 1,400 2,400 3,800
Machine setups setups 42,880 300 200 500
General factory MHs 406,620 4,200 3,900 8,100
$520,636
The activity rate for the Labor-Related activity cost pool under activity-based costing is closest
to:
40. Data concerning three of the activity cost pools of Salcido LLC, a legal firm, have been
provided below:
Activity Cost Pools Total Cost Total Activity
Researching legal issues $20,480 640 research hours
Meeting with clients $1,182,239 7,253 meeting hours
Preparing documents $91,840 5,740 documents
The activity rate for the Meeting With Clients activity cost pool is closest to:
41. Gerula, Inc., manufactures and sells two products: Product Z9 and Product Q6. The
company has 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 Z9
Product Q6
Total
Labor-related DLHs $130,291 3,500 1,400 4,900
Production orders orders 77,022 400 500 900
General factory MHs 182,070 3,200 3,100 6,300
$389,383
The activity rate for the General Factory activity cost pool under activity-based costing is closest
to:
42. Bewig, Inc., manufactures and sells two products: Product E8 and Product R4. The
company has 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 E8
Product R4
Total
Labor-related DLHs $201,717 4,800 4,500 9,300
Machine setups setups 69,020 400 300 700
General factory MHs 140,553 3,300 3,000 6,300
$411,290
The activity rate for the Machine Setups activity cost pool is closest to:
3-31
43. Scarff, Inc., manufactures and sells two products: Product O6 and Product K2. 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 O6 400 6.0 2,400
Product K2 900 4.0 3,600
Total direct labor-hours 6,000
The direct labor rate is $23.20 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product O6 $291.10
Product K2 $135.30
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 O6
Product K2
Total
Labor-related DLHs $136,380 2,400 3,600 6,000
Machine setups setups 53,690 400 600 1,000
General factory MHs 418,416 3,400 3,500 6,900
$608,486
44. Millner Corporation has provided the following data from its activity-based costing
accounting system:
Activity Cost Pools Total Cost Total Activity
Designing products $1,372,448 7,798 product design hours
Setting up batches $33,300 740 batch set-ups
Assembling products $126,160 6,640 assembly hours
The activity rate for the Designing Products activity cost pool is closest to:
45. Nick Company has two products: A and B. The company uses activity-based costing. The
total cost and activity for each of the company's three activity cost pools are as follows:
Estimated Expected Activity
Activity Cost Pools Overhead Cost Product A Product B Total
Product design $32,600 700 300 1000
Assembling $17,600 600 200 800
Supporting customers $52,500 400 100 500
The activity rate under the activity-based costing system for Supporting customers is closest to:
46. Jeanlouis, Inc., manufactures and sells two products: Product D0 and Product D5. The
company has 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 D0
Product D5
Total
Labor-related DLHs $313,743 3,600 3,300 6,900
Production orders orders 70,264 300 500 800
General factory MHs 253,555 4,300 4,200 8,500
$637,562
The total overhead applied to Product D5 under activity-based costing is closest to:
47. Wlodarczyk, Inc., manufactures and sells two products: Product J0 and Product Q9. 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 J0 500 5.0 2,500
Product Q9 900 7.0 6,300
Total direct labor-hours 8,800
The company has 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 J0
Product Q9
Total
Labor-related DLHs $234,168 2,500 6,300 8,800
Machine setups setups 13,800 300 200 500
General factory MHs 112,423 3,100 3,000 6,100
$360,391
The overhead applied to each unit of Product J0 under activity-based costing is closest to:
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