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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 440 Product EO Product NO Total direct labor-hours Direct Total Direct Labor-Hours Labor-Hours Per Unit 10.4 4,576 9.4 15,980 20,556 1,700 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Expected Activity Activity Cost Pools Labor-related Production orders Order size Activity Measures DLHS orders MHs Estimated Overhead Cost $303,390 62,587 586,866 $952,843 Product EO 4,576 1,000 5,700 Product NO 15,980 1,100 5,400 Total 20,556 2,100 11,100 The activity rate for the Order Size activity cost pool under activity-based costing is closest to: Multiple Choice $29.80 per MH $52.87 per MH 0 $46.35 per MH $46.35 per MH $18.99 per MH
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