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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:

VIP Kommander
Direct materials per unit $ 27.50 $ 62.10
Direct labor per unit $ 15.60 $ 52.00
Direct labor-hours per unit 0.60 2.00
Annual production 40,400 15,400

The company's estimated total manufacturing overhead for the year is $2,670,096 and the company's estimated total direct labor-hours for the year is 55,040.

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 Estimated Overhead Cost
Assembling products (DLHs) $ 1,064,000
Preparing batches (batches) 420,496
Product support (product variations) 1,185,600
Total $ 2,670,096

Expected Activity
VIP Kommander Total
DLHs 24,240 30,800 55,040
Batches 1,498 1,066 2,564
Product variations 2,652 1,248 3,900

Unit overhead cost of Product Kommander under the activity-based costing system is closest to:

Multiple Choice

$74.65.

$198.63.

$222.55.

$123.98.

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