3-383
Which of the following statements concerning the unit product cost of Product A8 is true?
3-384
3-385
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?
3-387
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
Processing customer orders
per customer order
Assembling products
per assembly hour
Setting up batches
per batch
3,588.97
Total overhead cost
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?
3-389
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?
3-391
3-392
68.
Trisdale, Inc., manufactures and sells two products: Product V5 and Product X3. 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 V5
900
5.0
4,500
Product X3
1,000
3.0
3,000
Total direct labor-
hours
7,500
The company’s total manufacturing overhead is $372,695. If the company allocates all of
its overhead based on direct labor-hours, the predetermined overhead rate would be
closest to:
3-393
69.
Sow, Inc., manufactures and sells two products: Product I4 and Product P3. 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 I4
700
8.0
5,600
Product P3
400
9.0
3,600
Total direct labor-
hours
9,200
The direct labor rate is $24.70 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product I4
$136.60
Product P3
$145.70
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 I4
Product P3
Total
Labor-related
DLHs
$210,404
5,600
3,600
9,200
Product testing
tests
59,983
300
400
700
General factory
MHs
613,015
3,300
3,200
6,500
$883,402
3-394
The unit product cost of Product P3 under the company’s traditional costing method in
which all overhead is allocated on the basis of direct labor-hours is closest to:
3-395
70.
Molinas, Inc., manufactures and sells two products: Product G1 and Product S8. 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 G1
800
8.0
6,400
Product S8
1,000
5.0
5,000
Total direct labor-
hours
11,400
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 G1
Product S8
Total
Labor-related
DLHs
$239,172
6,400
5,000
11,400
Product testing
tests
55,524
400
300
700
General factory
MHs
685,580
3,400
3,600
7,000
$980,276
If the company allocates all of its overhead based on direct labor-hours using its
traditional costing method, the predetermined overhead rate would be closest to:
3-396
3-397
71.
Finken, Inc., manufactures and sells two products: Product H9 and Product L0. 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 H9
400
5.0
2,000
Product L0
800
6.0
4,800
Total direct labor-
hours
6,800
Direct materials
The direct labor rate is $16.10 per DLH. The direct materials cost per unit is $256.40 for
Product H9 and $125.00 for Product L0. The estimated total manufacturing overhead is
$441,772.
The unit product cost of Product L0 under the company’s traditional costing method in
which all overhead is allocated on the basis of direct labor-hours is closest to:
3-398
3-399
72.
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
3-400
The unit product cost of Product P4 under activity-based costing is closest to:
3-401
3-402
73.
Lamon, Inc., manufactures and sells two products: Product J9 and Product R6. 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 J9
300
9.0
2,700
Product R6
900
7.0
6,300
Total direct labor-
hours
9,000
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 J9
Product R6
Total
Labor-related
DLHs
$302,490
2,700
6,300
9,000
Machine setups
setups
60,088
400
300
700
General factory
MHs
95,282
3,700
3,400
7,100
$457,860
If the company allocates all of its overhead based on direct labor-hours using its
traditional costing method, the overhead assigned to each unit of Product J9 would be
closest to: