3-83
62. Warder, Inc., manufactures and sells two products: Product B9 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 B9 700 6.0 4,200
Product W2 400 4.0 1,600
Total direct labor-hours 5,800
The direct labor rate is $20.50 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product B9 $105.40
Product W2 $181.30
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 B9
Product W2 Total
Labor-related DLHs $109,794 4,200 1,600 5,800
Production orders orders 43,680 300 400 700
General factory MHs 741,900 4,900 5,100 10,000
$895,374
Which of the following statements concerning the unit product cost of Product B9 is true?
3-87
63. Woofter, Inc., manufactures and sells two products: Product Q7 and Product L4. 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 Q7 1,000 8.0 8,000
Product L4 300 10.0 3,000
Total direct labor-hours 11,000
The direct labor rate is $25.60 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product Q7 $118.50
Product L4 $263.30
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 Q7
Product L4
Total
Labor-related DLHs $393,360 8,000 3,000 11,000
Product testing tests 43,923 600 500 1,100
General factory MHs 645,348 3,200 3,400 6,600
$1,082,631
3-88
Which of the following statements concerning the unit product cost of Product L4 is true?
3-91
64. Molette, Inc., manufactures and sells two products: Product A8 and Product P0. 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 A8 700 8.0 5,600
Product P0 1,000 11.0 11,000
Total direct labor-hours 16,600
The direct labor rate is $28.80 per DLH. The direct materials cost per unit for each product is
given below:
Direct Materials Cost per Unit
Product A8 $191.40
Product P0 $171.10
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 A8
Product P0
Total
Labor-related DLHs $625,986 5,600 11,000 16,600
Machine setups setups 52,426 500 600 1,100
General factory MHs 201,438 4,800 4,500 9,300
$879,850
3-92
Which of the following statements concerning the unit product cost of Product A8 is true?
65. Hane Corporation uses the following activity rates from its activity-based costing to
assign overhead costs to products:
Activity Cost Pools Activity Rate
Assembling products $8.90 per assembly hour
Processing customer orders $31.23 per customer order
Setting up batches $43.72 per batch
Data for one of the company’s products follow:
Product U94W
Number of assembly hours 389
Number of customer orders 53
Number of batches 61
How much overhead cost would be assigned to Product U94W using the activity-based costing
system?
66. Activity rates from Lippard Corporation’s activity-based costing system are listed below.
The company uses the activity rates to assign overhead costs to products:
Activity Cost Pools Activity Rate
Processing customer orders $31.62 per customer order
Assembling products $2.86 per assembly hour
Setting up batches $46.61 per batch
Last year, Product H50E involved 9 customer orders, 666 assembly hours, and 77 batches. How
much overhead cost would be assigned to Product H50E using the activity-based costing
system?
67. Gould Corporation uses the following activity rates from its activity-based costing to
assign overhead costs to products:
Activity Cost Pools Activity Rate
Setting up batches $59.06 per batch
Processing customer orders $72.66 per customer order
Assembling products $3.75 per assembly hour
Data concerning two products appear below:
Product K91B Product F65O
Number of batches 84 50
Number of customer orders 32 43
Number of assembly hours 483 890
How much overhead cost would be assigned to Product K91B using the activity-based costing
system?
