185. Mellencamp, Inc., manufactures and sells two products: Product A3 and Product Y6. 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 A3 900 8.0 7,200
Product Y6 800 10.0 8,000
Total direct labor-hours 15,200
The direct labor rate is $24.20 per DLH. The direct materials cost per unit is $146.60 for Product
A3 and $256.20 for Product Y6
.
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 A3
Product Y6
Total
Labor-related DLHs $670,624 7,200 8,000 15,200
Production orders orders 41,545 400 300 700
General factory MHs 281,281 3,800 3,900 7,700
$993,450
The unit product cost of Product A3 under activity–based costing is closest to:
186. Mellencamp, Inc., manufactures and sells two products: Product A3 and Product Y6. 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 A3 900 8.0 7,200
Product Y6 800 10.0 8,000
Total direct labor-hours 15,200
The direct labor rate is $24.20 per DLH. The direct materials cost per unit is $146.60 for Product
A3 and $256.20 for Product Y6
.
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 A3
Product Y6
Total
Labor-related DLHs $670,624 7,200 8,000 15,200
Production orders orders 41,545 400 300 700
General factory MHs 281,281 3,800 3,900 7,700
$993,450
The unit product cost of Product Y6 under activity–based costing is closest to:
187. The controller of Hartis Company estimates the amount of materials handling overhead
cost that should be allocated to the company’s two products using the data that are given below:
Wall Mirrors Specialty Windows
Total expected units produced 8,000 7,000
Total expected material moves 300 900
Expected direct labor-hours per unit 5 7
The total materials handling cost for the year is expected to be $38,448.00.
If the materials handling cost is allocated on the basis of direct labor-hours, the total materials
handling cost allocated to the wall mirrors is closest to:
188. The controller of Hartis Company estimates the amount of materials handling overhead
cost that should be allocated to the company’s two products using the data that are given below:
Wall Mirrors Specialty Windows
Total expected units produced 8,000 7,000
Total expected material moves 300 900
Expected direct labor-hours per unit 5 7
The total materials handling cost for the year is expected to be $38,448.00.
If the materials handling cost is allocated on the basis of material moves, the total materials
handling cost allocated to the specialty windows is closest to:
189. Malan Corporation has provided the following data from its activity-based costing
accounting system:
Activity Cost Pools Estimated Overhead Cost
Expected Activity
Designing products $423,550 2,150 product design hours
Setting up batches $30,150 670 batch set-ups
Assembling products $118,920 9,910 assembly hours
Required:
Compute the activity rates for each of the three cost pools. Show your work!
190. Data concerning three of Falkenstein Corporation’s activity cost pools appear below:
Activity Cost Pools Estimated Overhead Cost
Expected Activity
Assembling products $32,040 2,670 assembly hours
Designing products $1,400,874 7,221 product design hours
Setting up batches $25,380 540 batch set-ups
Required:
Compute the activity rates for each of the three cost pools. Show your work!
3-392
191. Joanette, Inc., manufactures and sells two products: Product A0 and Product Q0. 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 A0 700 9.0 6,300
Product Q0 900 7.0 6,300
Total direct labor-hours 12,600
The direct labor rate is $18.90 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product A0 $194.70
Product Q0 $260.90
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 A0
Product Q0
Total
Labor-related DLHs $295,722 6,300 6,300 12,600
Product testing Tests 38,500 300 200 500
General factory MHs 745,668 4,300 4,100 8,400
$1,079,890
3-393
Required:
Determine the unit product cost of each product under the activity-based costing method.
3-396
192. Trezise, Inc., manufactures and sells two products: Product L7 and Product O3. 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 L7 400 6.0 2,400
Product O3 900 4.0 3,600
Total direct labor-hours 6,000
The direct labor rate is $15.60 per DLH. The direct materials cost per unit is $257.70 for Product
L7 and $288.30 for Product O3.
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 L7 Product O3
Total
Labor-related DLHs $72,180 2,400 3,600 6,000
Machine setups Setups 64,421 400 300 700
General factory MHs 529,100 3,400 3,100 6,500
$665,701
3-397
Required:
In all computations involving dollars in the following requirements, round off your answer to the
nearest whole cent.
a. Compute the activity rates under the activity-based costing system.
b. Determine how much overhead would be assigned to each product under the activity-based
costing system.
c. Determine the unit product cost of each product under the activity-based costing method.
3-398
3-400
193. Stirman, Inc., manufactures and sells two products: Product Z2 and Product F0. 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 Z2 800 9.0 7,200
Product F0 500 8.0 4,000
Total direct labor-hours 11,200
The direct labor rate is $28.60 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product Z2 $189.60
Product F0 $201.70
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 Z2 Product F0
Total
Labor-related DLHs $235,536 7,200 4,000 11,200
Production orders Orders 27,234 400 500 900
General factory MHs 173,180 3,600 3,400 7,000
$435,950
Required:
Determine the unit product cost of each product under the activity-based costing method.