3-343
Computation of unit product costs under activity-based costing.
3-344
50.
Dobles Corporation has provided the following data from its activity-based costing system:
Activity Cost Pools
Estimated Overhead Cost
Expected Activity
Assembly
$228,060
18,000
machine-hours
Processing orders
$34,068
1,200
orders
Inspection
$125,560
1,720
inspection-hours
Assembly
18,000
machine-hours
$12.67
per machine-hour
The company makes 420 units of product D28K a year, requiring a total of 460 machine-
hours, 80 orders, and 10 inspection-hours per year. The product’s direct materials cost is
$48.96 per unit and its direct labor cost is $25.36 per unit.
According to the activity-based costing system, the unit product cost of product D28K is
closest to:
3-346
51.
Fullard, Inc., manufactures and sells two products: Product E2 and Product G3. 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 E2
1,000
6.0
6,000
Product G3
800
5.0
4,000
Total direct labor-
hours
10,000
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 E2
Product G3
Total
Labor-related
DLHs
$269,900
6,000
4,000
10,000
Machine setups
setups
74,178
500
400
900
General factory
MHs
865,080
4,300
4,600
8,900
$1,209,158
The total overhead applied to Product E2 under activity-based costing is closest to:
3-347
3-348
52.
Nethery, Inc., manufactures and sells two products: Product U5 and Product X2. 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 U5
Product X2
Total
Labor-related
DLHs
$36,180
2,400
1,200
3,600
Product testing
tests
65,760
400
600
1,000
General factory
MHs
133,984
4,000
3,900
7,900
$235,924
Labor-related
3,600
DLHs
$10.05
per DLH
Product testing
1,000
tests
$65.76
per test
General factory
7,900
$16.96
per MH
The total overhead applied to Product U5 under activity-based costing is closest to:
3-349
3-350
53.
Drucker, Inc., manufactures and sells two products: Product F0 and Product M6. 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 F0
400
7.0
2,800
Product M6
400
6.0
2,400
Total direct labor-
hours
5,200
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 F0
Product M6
Total
Labor-related
DLHs
$165,828
2,800
2,400
5,200
Product testing
tests
86,306
600
500
1,100
General factory
MHs
131,900
4,900
5,100
10,000
$384,034
The overhead applied to each unit of Product M6 under activity-based costing is closest
to:
3-351
3-352
3-353
54.
Kuperman, Inc., manufactures and sells two products: Product V1 and Product D8. The
production of Product V1 is 400 units and of Product D8 is 200 units. 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 V1
Product D8
Total
Labor-related
DLHs
$180,796
2,800
1,600
4,400
Product testing
tests
43,795
300
200
500
General factory
MHs
602,286
3,800
3,600
7,400
$826,877
Labor-related
DLHs
per DLH
Product testing
tests
per test
The overhead applied to each unit of Product V1 under activity-based costing is closest
to:
3-354
3-355
55.
Pat Company uses activity-based costing. The company has two products: A and B. The
annual production and sales of Product A is 4,000 units and of Product B is 1,000 units.
There are three activity cost pools, with estimated total cost and expected activity as
follows:
Estimated
Expected Activity
Activity Cost Pools
Overhead Cost
Product A
Product B
Total
Activity 1
$18,000
700
300
1,000
Activity 2
$24,000
500
100
600
Activity 3
$60,000
800
400
1,200
Activity 1
Activity 2
600
Activity 3
The overhead cost per unit of Product A under activity-based costing is closest to:
3-356
3-357
56.
Onstad, Inc., manufactures and sells two products: Product E5 and Product C0. Expected
production of Product E5 is 500 units and of Product C0 is 400 units. 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 E5
Product C0
Total
Labor-related
DLHs
$153,939
4,500
2,400
6,900
Production orders
orders
119,574
600
700
1,300
General factory
MHs
259,077
4,500
4,600
9,100
$532,590
The overhead applied to each unit of Product C0 under activity-based costing is closest
to:
Labor-related
6,900
DLHs
$22.31
per DLH
Production orders
1,300
orders
$91.98
per order
3-358
3-359
57.
Whiteley, Inc., manufactures and sells two products: Product M5 and Product P4. 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 M5
200
9.0
1,800
Product P4
100
12.0
1,200
Total direct labor-hours
3,000
The direct labor rate is $27.50 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product M5
$185.20
Product P4
$244.20
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 M5
Product P4
Total
Labor-related
DLHs
$117,330
1,800
1,200
3,000
Product testing
tests
9,499
400
300
700
General factory
MHs
641,606
5,000
4,800
9,800
$768,435
The unit product cost of Product P4 under activity-based costing is closest to:
58.
Paparo Corporation has provided the following data from its activity-based costing system:
Activity Cost Pools
Estimated Overhead Cost
Expected Activity
Assembly
$846,040
52,000
machine-hours
Processing orders
$64,056
1,700
orders
Inspection
$102,408
1,360
inspection-hours
Data concerning the company’s product Q79Y appear below:
Annual unit production and sales
450
Annual machine-hours
1,080
Annual number of orders
70
Annual inspection hours
20
Direct materials cost
$44.00
per unit
Direct labor cost
$41.03
per unit
According to the activity-based costing system, the unit product cost of product Q79Y is
closest to: