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Lefave, Inc., manufactures and sells two products: Product Q1 and Product D5. Data concerning the expected production of each product and the expected total direct
Lefave, Inc., manufactures and sells two products: Product Q1 and Product D5. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Total Direct Expected Hours Per Labor- Hours 14,490 3,465 17,955 Direct Labor- Production Unit 6.3 Product Q1 Product D5 Total direct labor-hours 2,300 1,050 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 Activity Cost Pools Measures Labor-related Product testing Order size Cost Product Q1 Product D5 DLHS tests MHS $165,482 61,909 217,825 $445,216 14,490 1,050 5,100 3,465 950 5,000 Total 17,955 2,000 10,100 If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the predetermined overhead rate would be closest to If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the predetermined overhead rate would be closest to: Multiple Choice $21.57 per DLH $9.22 per DLH $30.95 per DLH $24.80 per DLH
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