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3-422
200. Meiler, Inc., manufactures and sells two products: Product T6 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 T6 400 9.0 3,600
Product U1 100 7.0 700
Total direct labor-hours 4,300
The direct labor rate is $15.90 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product T6 $154.10
Product U1 $241.20
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 T6
Product U1
Total
Labor-related DLHs $148,995 3,600 700 4,300
Production orders Orders 53,811 500 400 900
General factory MHs 488,992 3,600 3,800 7,400
$691,798
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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.
3-426
201. Vivino, Inc., manufactures and sells two products: Product T3 and Product J4. 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 T3 700 9.0 6,300
Product J4 1,000 7.0 7,000
Total direct labor-hours 13,300
The direct labor rate is $24.80 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product T3 $161.30
Product J4 $277.80
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 T3 Product J4
Total
Labor-related DLHs $394,877 6,300 7,000 13,300
Machine setups Setups 22,716 500 400 900
General factory MHs 454,480 4,700 4,800 9,500
$872,073
3-427
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.
3-430
202. Klasinski, Inc., manufactures and sells two products: Product C2 and Product V1. 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 C2 100 5.0 500
Product V1 200 3.0 600
Total direct labor-hours 1,100
The direct labor rate is $26.40 per DLH. The direct materials cost per unit is $106.80 for Product
C2 and $131.40 for Product V1.
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 C2
Product V1
Total
Labor-related DLHs $30,184 500 600 1,100
Product testing Tests 11,564 300 400 700
General factory MHs 814,815 4,600 4,900 9,500
$856,563
Required:
Determine the unit product cost of each product under the activity-based costing method.
3-431
3-433
203. Dameron, Inc., manufactures and sells two products: Product J5 and Product E7. 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 J5 400 9.0 3,600
Product E7 900 11.0 9,900
Total direct labor-hours 13,500
The direct labor rate is $15.90 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product J5 $220.10
Product E7 $125.10
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 J5
Product E7
Total
Labor-related DLHs $308,340 3,600 9,900 13,500
Product testing Tests 54,144 300 500 800
General factory MHs 403,956 3,300 3,000 6,300
$766,440
3-434
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.
3-437
204. Parody, Inc., manufactures and sells two products: Product W5 and Product V5. 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 W5 900 7.0 6,300
Product V5 500 9.0 4,500
Total direct labor-hours 10,800
The direct labor rate is $16.30 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product W5 $231.60
Product V5 $132.80
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 W5
Product V5
Total
Labor-related DLHs $326,916 6,300 4,500 10,800
Production orders Orders 21,820 400 600 1,000
General factory MHs 830,180 5,000 5,300 10,300
$1,178,916
3-438
Required:
In all computations involving dollars in the following requirements, round off your answer to the
nearest whole cent.
a. The company currently uses a traditional costing method in which overhead is applied to
products based solely on direct labor-hours. Compute the company's predetermined overhead
rate under this costing method.
b. How much overhead would be applied to each product under the company's traditional costing
method?
c. Determine the unit product cost of each product under the company's traditional costing
method.
d. Compute the activity rates under the activity-based costing system.
e. Determine how much overhead would be assigned to each product under the activity-based
costing system.
f. Determine the unit product cost of each product under the activity-based costing method.
