Question
Bobzien, Incorporated, manufactures and sells two products: Product B7 and Product Z5. Data concerning the expected production of each product and the expected total direct
Bobzien, Incorporated, manufactures and sells two products: Product B7 and Product Z5. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Product B7 Product Z5 Total direct labor-hours Expected Hours Per Production 300 800 Activity Cost Pools Labor-related Production orders Order size Direct Labor- Activity Measures DLHS orders MHs The direct labor rate is $15.10 per DLH. The direct materials cost per unit is $136.20 for Product B7 and $204.40 for Product Z5. Estimated Overhead Cost Unit 5.0 3.0 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: $ 39,585 26,884 462,768 $529,237 Total Direct Labor- Hours 1,500 2,400 3,900 Expected Activity Product B7 Product Z5 1,500 2,400 500 600 4,600 4,700 Total 3,900 1,100 9,300 The activity rate for the Production Orders activity cost pool under activity-based costing is closest to:
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