Chrzan, Inc., manufactures and sells two products: Product E0 and Product N0. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:

	Expected Production	Direct Labor-Hours Per Unit	Total Direct Labor-Hours
Product E0	480	10.8	5,184
Product N0	1,900	9.8	18,620
Total direct labor-hours			23,804

The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

		Estimated		Expected Activity
Activity Cost Pools	Activity Measures	Overhead Cost		Product E0	Product N0	Total
Labor-related	DLHs	$	305,390	5,184	18,620	23,804
Production orders	orders		64,587	1,200	1,300	2,500
Order size	MHs		588,866	5,900	5,600	11,500
		$	958,843

The activity rate for the Order Size activity cost pool under activity-based costing is closest to:

rev: 03_25_2018_QC_CS-119201

Multiple Choice

• $25.83 per MH

• $51.21 per MH

• $40.28 per MH

• $16.40 per MH