ABC Company 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, A and B, about which it has provided the following data: A B Direct materials per unit $19.90 $54.40 Direct labor per unit. $12.00 $31.50 Direct labor hours per unit 0.80 2.10 Annual production (units) 30,000 10,000 The company's estimated total manufacturing overhead for the year is $2,063,250 and the company's estimated total direct labor hours for the year is 45,000. The company is considering using 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 Assembling products (DL hours) Estimated Overhead Cost $720,000 Preparing batches (batches) $263,250 Product support (product variations) $1.080.000 $2,063,250 Total ments DL hours Batches Product variations Expected Activity A B Total 24,000 21,000 45,000 1,080 675 1,755 2,115 1,485 3,600 The manufacturing overhead that would be applied to a unit of product B under the activity- based costing system is closest to: $88.28 Product variations 2,115 1,485 3,600 The manufacturing overhead that would be applied to a unit of product B under the activity- based costing system is closest to: $88.28 $10.13 $184.57 O $96.29 Previous Next