Chapter 6 Activity-Based. Variable, and Absorption Costing 2. LO 6.1 Tye Dye Lights makes two products: Party and Holiday. It takes 80,900 direct labor hours to manufacture the Party Line and 93,500 direct labor hours to manufacture the Holiday Line. Overhead consists! of $225,000 in the machine setup cost pool and $149,960 in the packaging cost pool. The machine setup pool has 52,000 setups for the Party product and 98,000 setups for the Holiday product. The packaging cost pool has 26,000 parts in the Party product and 39,200 parts for the Holiday product. Using the traditional cost method of direct labor hours, what is the predetermined overhead rate? A. $1.50 per direct labor hour B. $2.15 per direct labor hour C. $2.30 per direct labor hour D. $3.80 per direct labor hour 2 MAL 62 Which le not chain swi m fixed costs included in beginning inventory. Variable costing is not considered GAAP compliant but lends itself to cost-volume-profit analysis. Multiple Choice 1. LO 6.1 Active Frame, Inc., manufactures clear and tinted sport glasses. The manufacturing of clear glasses takes 45,000 direct labor hours and involves 1,700 parts and 115 inspections. The manufacturing of tinted glasses takes 115,000 direct labor hours and involves 1,400 parts and 450 inspections. The traditional method applies $560,000 of overhead on the basis of direct labor hours. What is the amount of overhead per direct labor hour applied to the clear glass products? A. $933.33 B. $157,500 C. $322.500 D. $402,500