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39 Upton Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on
39
Upton Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, Long and Short, about which it has provided the following data: Direct materials per unit Direct labor per unit Direct labor-hours per unit Annual production Long $ 14.20 $ 16.80 0.80 56,000 Short $ 48.30 $ 50.40 2.40 12,200 The company's estimated total manufacturing overhead for the year is $3,054,160 and the company's estimated total direct labor-hours for the year is 74,080. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Activities and Activity Measures Direct labor support (DLHS) Setting up machines (setups) Part administration (part types) Total Estimated Overhead Cost $1,600,000 425,040 1,029,120 $3,054,160 DLHS Setups Part types Expected Activity Long Short Total 44,800 29, 280 74,080 1,360 1,720 3,080 1,230 2,790 4,020 Unit overhead cost of Product Short under the activity-based costing system is closest to: Multiple Choice $76.55. $174.91. $206.39. $129.84Step by Step Solution
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