Question
Dunnivan, Inc., manufactures and sells two products: Product T4 and Product A1. Data concerning the expected production of each product and the expected total direct
Dunnivan, Inc., manufactures and sells two products: Product T4 and Product A1. 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 T4 | 900 | 8.0 | 7,200 |
Product A1 | 800 | 7.0 | 5,600 |
Total direct labor-hours | 12,800 |
The direct labor rate is $29.90 per DLH. The direct materials cost per unit for each product is given below:
Direct Materials Cost per Unit | |
Product T4 | $214.50 |
Product A1 | $261.80 |
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 T4 | Product A1 | Total |
Labor-related | DLHs | $598,016 | 7,200 | 5,600 | 12,800 |
Machine setups | setups | 12,024 | 500 | 400 | 900 |
General factory | MHs | 624,624 | 4,600 | 4,500 | 9,100 |
$1,234,664 |
The unit product cost of Product T4 under activity-based costing is closest to:
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