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A: 31.06 B: 4.05 C: 15.98 D: 7.67 Markham Company makes two products: Basic Product and Deluxe Product. Annual production and sales are 2.400 units
A: 31.06
B: 4.05
C: 15.98
D: 7.67
Markham Company makes two products: Basic Product and Deluxe Product. Annual production and sales are 2.400 units of Basic Product and 2,000 units of Deluxe Product. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Basic Product requires 0.3 direct labor hours per unit and Deluxe Product requires 0.6 direct labor hours per unit. The total estimated overhead for next period is $99,385. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity- based costing system would have three overhead activity cost pools-Activity 1. Activity 2 and General Factory-with estimated overhead costs and expected activity as follows: Activity Cost Pool Activity 1 Activity 2 General Factory Total Estimated Overhead Costs $ 30,672 17,565 51,148 $ 99,385 Expected Activity Basic Deluxe Product Product Total 1,600 800 2,400 2,200 400 2,600 720 1,200 1,920 The overhead cost per unit of Deluxe Product under the traditional costing system is closest toStep by Step Solution
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