Item 7

Vanvalkenburg, Inc., manufactures and sells two products: Product Q5 and Product J0. The company has 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 Q5	Product J0	Total
Labor-related	DLHs	$	191,748	3,000	2,800	5,800
Production orders	orders		70,536	300	500	800
Order size	MHs		295,592	4,300	4,500	8,800
		$	557,876

The activity rate for the Order Size activity cost pool under activity-based costing is closest to:

rev: 03_22_2018_QC_CS-119201

Multiple Choice

• $36.23 per MH

• $68.48 per MH

• $96.19 per MH

• $33.59 per MH

7B.

Weirick, Inc., manufactures and sells two products: Product T8 and Product P4. The company has 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 T8	Product P4	Total
Labor-related	DLHs	$	118,800	8,800	4,400	13,200
Production orders	orders		56,010	1,200	200	1,400
Order size	MHs		876,030	3,500	2,700	6,200
		$	1,050,840

The total overhead applied to Product P4 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

rev: 03_25_2018_QC_CS-119201

Multiple Choice

• $820,020
• $381,510
• $429,112
• $932,040

7C.

Wimpy Inc. produces and sells a single product. The selling price of the product is $160.00 per unit and its variable cost is $48.00 per unit. The fixed expense is $399,420 per month.

The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)

Multiple Choice

• $1,331,400
• $931,980
• $570,600
• $399,420