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Look Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct
Look 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, No6D and MOSK, about which it has provided the following dota: MO9K NO6D $ 33.40 $ 61.20 $ 6.00 $ 28.00 Direct materials per unit Direct labor per unit Direct labor-hours per unit Annual production (units) 0.20 1.00 48,200 15,000 The company's estimated total manufacturing overhead for the year is $1,754,571 and the company's estimated total direct labor-hours for the year is 24,640 The company is considering using a variation 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 Supporting direct labor (LIS) Setting up machines (setups) Parts administration (part types) Total Entimated Overhead Cost $ 262,400 476,307 415.864 $1,754.571 Expected Activity NO6D MOOK Total 9,640 15,000 24,640 1.670 1.021 2.691 DLS Setus DLHS Setups Part types NO6D 9,640 1,670 641 MO9K 15,000 1,021 267 Total 24,640 2,691 908 The manufacturing overhead that would be applied to a unit of product MOSK under the activity-based costing system is closest to: Multiple Choice $65.75 $32.80 555.20 596 26
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