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Chrzan, Inc., manufactures and sells two products: Product EO and Product NO. Data concerning the expected production of each product and the expected total direct
Chrzan, Inc., manufactures and sells two products: Product EO and Product NO. 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- Total Direct Hours Per Unit Labor-Hours Product E0 10.9 5,341 490 9.9 Product NO 1,950 19,305 Total direct labor- 24,646 hours 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 Overhead Activity Cost Pools Product E0 Product NO Total Measures Cost 305,890 5,341 Labor-related 19,305 24,646 DLHS Production orders orders 1,250 65,087 1,350 2,600 MHs 589,366 Order size 5,650 5,950 11,600 960,343 The activity rate for the Order Size activity cost pool under activity-based costing is closest to: Multiple Choice $25.03 per MH $50.81 per MH $38.97 per MH $15.85 per MH
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