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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 Direct Labor-Total Direct Hours Per Production Labor-Hours Unit 9.5 3,325 Product EO 350 1,250 8.5 10,625 Product NO 13,950 Total direct labor-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 Product EO Product NO Total Activity Cost Pools Measures Cost $ 298,890 3,325 10,625 13,950 Labor-related DLHS Production orders 58,087 550 650 1,200 orders MHs 582,366 5,250 4,950 10,200 Order size 939,343 The activity rate for the Order Size activity cost pool under activity-based costing is closest to: O A. $57.09 per MH O B. $28.13 per MH O C. $67.34 per MH O D. $48.41 per MH
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