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
The overhead cost per unit of Product A under activity-based costing is closest to:
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:
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:
59. Crazier, Inc., manufactures and sells two products: Product U8 and Product W2. 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 U8 500 6.0 3,000
Product W2 400 5.0 2,000
Total direct labor-hours 5,000
The direct labor rate is $22.10 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product U8 $160.80
Product W2 $185.40
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 U8
Product W2 Total
Labor-related DLHs $237,900 3,000 2,000 5,000
Production orders orders 29,232 600 800 1,400
General factory MHs 364,364 4,700 4,400 9,100
$631,496
The unit product cost of Product U8 is closest to:
60. Karsten, Inc., manufactures and sells two products: Product M8 and Product I2. 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 M8 700 9.0 6,300
Product I2 300 6.0 1,800
Total direct labor-hours 8,100
The direct labor rate is $21.20 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product M8 $211.30
Product I2 $242.90
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 M8
Product I2 Total
Labor-related DLHs $299,781 6,300 1,800 8,100
Machine setups setups 46,514 600 700 1,300
General factory MHs 462,981 4,900 4,800 9,700
$809,276
The unit product cost of Product I2 under activity-based costing is closest to:
3-79
61. Recek, Inc., manufactures and sells two products: Product Y5 and Product N7. 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 Y5 1,000 6.0 6,000
Product N7 400 8.0 3,200
Total direct labor-hours 9,200
The direct labor rate is $22.90 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product Y5 $252.90
Product N7 $202.00
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 Y5
Product N7 Total
Labor-related DLHs $321,724 6,000 3,200 9,200
Machine setups setups 67,221 400 500 900
General factory MHs 905,262 4,800 4,500 9,300
$1,294,207
Which of the following statements concerning the unit product cost of Product N7 is true?
