Question
Feauto Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on
Feauto Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHS). The company has two products, 163E and E761, about which it has provided the following data: Direct materials per unit 163E $ 20.70 E761 $ 62.10 Direct labor per unit $ 19.60 $ 58.80 Direct labor-hours per unit Annual production (units) 0.90 51,000 2.70 17,000 The company's estimated total manufacturing overhead for the year is $2.264,400 and the company's estimated total direct labor-hours for the year is 91,800 The company is considering using a form of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below Activities and Activity Measures Assembling products (direct labor-hours) Preparing batches (batches) Product support (product variations) Total Estimated Overhead Cost $ 1,377,000 191,400 696,000 $ 2,264,400 Direct labor-hours Batches Product variations Expected Activity 163E 45,900 E761 45,900 Total 91,800 1,200 2,400 790 1,580 1,990 3,980 The manufacturing overhead that would be applied to a unit of product 163E under the company's traditional costing system is closest to:
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started