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Cassidy Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct
Cassidy 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, VIP and Kommander, about which it has provided the following data: Direct materials per unit Direct labor per unit VIP Kommander $ 27.50 $ 62.10 $ 15.60 $ 52.00 Direct labor-hours per unit Annual production 0.60 43,600 2.00 18,600 The company's estimated total manufacturing overhead for the year is $2,557,440 and the company's estimated total direct labor-hours for the year is 63,360. 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 Assembling products (DLBS) Preparing batches (batches) Product support (product variations) Total Estimated Overhead Cost $ 954,000 433,440 1,170,000 $2,557,440 Expected Activity VIP Kommander Total DLHS 26,160 37,200 63,360 Batches. 1,818 1,386 3,204. Product variations 3,132 1,728 4,860 Expected Activity VIP Kommander Total DLHS 26,160 37,200 63,360 Batches 1,818 1,386 3,204 Product variations 3,132 1,728 4,860 The unit product cost of Product VIP under the company's traditional costing system is closest to: Multiple Choice $67.32. $51.02. $75.21 $41.26. < Prev 8 of 25 Next > D Help Save & Exit
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