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:

	Expected Production	Direct Labor-Hours Per Unit	Total Direct Labor-Hours
Product Q1	2,200	6.2	13,640
Product D5	1,000	3.2	3,200
Total direct labor-hours			16,840

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 Q1	Product D5	Total
Labor-related	DLHs	$	164,482	13,640	3,200	16,840
Product testing	tests		60,909	1,000	900	1,900
Order size	MHs		216,825	5,000	4,900	9,900
		$	442,216

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:

rev: 03_25_2018_QC_CS-119201

Multiple Choice

• $9.77 per DLH

• $26.26 per DLH

• $32.06 per DLH

• $21.90 per DLH