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Lefave, Incorporated, manufactures and sells two products: Product 1 and Product D5. Data concerning the expected production of each product and the expected total direct
Lefave, Incorporated, manufactures and sells two products: Product 1 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: Direct Labor Expected Hours Production Per Unit 2,600 6.6 1,206 3.6 Product Q1 Product D5 Total direct labor-hours Total Direct Labor- Hours 17.166 4,320 21, 480 The company is considering adopting an activity based costing system with the following activity cost pools, activity measures, and expected activity Activity Cost Pools Labor-related Product testing Order size Activity Measures DLHS tests MES Estimated Overhead Cost $ 168,482 64,909 220,825 $ 454, 216 Expected Activity Product Qi Product D5 Total 17.166 4,320 21, 486 1, 266 1, 169 2. 300 5, 400 5, 3BG 10,760 If the company allocates all of its overhead based on direct labor-nours using its traditional costing method, the predetermined overhead rate would be closest to
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