Question
13) Latiker, Inc., manufactures and sells two products: Product Y9 and Product W0. Data concerning the expected production of each product and the expected total
13) Latiker, Inc., manufactures and sells two products: Product Y9 and Product W0. 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 Y9 | 100 | 8.0 | 800 |
Product W0 | 100 | 10.0 | 1,000 |
Total direct labor-hours |
|
| 1,800 |
The direct labor rate is $15.40 per DLH. The direct materials cost per unit for each product is given below:
| Direct Materials Cost per Unit |
Product Y9 | $253.00 |
Product W0 | $278.80 |
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 Y9 | Product W0 | Total |
| |||||
Labor-related | DLHs | $ | 61,488 | 800 | 1,000 | 1,800 |
| ||||
Machine setups | setups |
| 50,687 | 400 | 300 | 700 |
| ||||
Order size | MHs |
| 155,754 | 5,000 | 5,200 | 10,200 |
| ||||
|
| $ | 267,929 |
|
|
|
| ||||
The activity rate for the Machine Setups activity cost pool under activity-based costing is closest to:
A) $31.15 per setup
B) $26.27 per setup
C) $29.95 per setup
D) $72.41 per setup
14) Chrzan, Inc., manufactures and sells two products: Product E0 and Product N0. 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 E0 | 300 | 9.0 | 2,700 |
Product N0 | 1,000 | 8.0 | 8,000 |
Total direct labor-hours |
|
| 10,700 |
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 E0 | Product N0 | Total | |||||
Labor-related | DLHs | $ | 296,390 | 2,700 | 8,000 | 10,700 |
| |||
Production orders | orders |
| 55,587 | 300 | 400 | 700 |
| |||
Order size | MHs |
| 579,866 | 5,000 | 4,700 | 9,700 |
| |||
|
| $ | 931,843 |
|
|
|
| |||
The activity rate for the Order Size activity cost pool under activity-based costing is closest to:
A) $44.16 per MH
B) $59.78 per MH
C) $87.09 per MH
D) $37.05 per MH
15) Strama, Inc., manufactures and sells two products: Product A6 and Product I5. 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 A6 | Product I5 | Total | |||||
Labor-related | DLHs | $ | 179,138 | 7,000 | 1,600 | 8,600 |
| |||
Production orders | orders |
| 38,624 | 300 | 500 | 800 |
| |||
Order size | MHs |
| 171,147 | 4,400 | 4,500 | 8,900 |
| |||
|
| $ | 388,909 |
|
|
|
| |||
The activity rate for the Order Size activity cost pool under activity-based costing is closest to:
A) $21.25 per MH
B) $111.96 per MH
C) $45.22 per MH
D) $19.23 per MH
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