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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, N06D and MOSK, about which it has provided the following data: Direct materials per unit Direct labor per unit Direct labor-hours per unit Annual production (units) NOOD $ 31.50 $ 14.00 0.20 45,300 M9K $ 66.30 $ 26.00 1.00 21,200 The company's estimated total manufacturing overhead for the year is $1,492,786 and the company's estimated total direct labor-hours for the year is 30,260. 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 (direct labor-hours) Setting up machines (setups) Parts administration (part types) Total Estimated Overhead Cost $ 665,720 445, 266 381,800 $ 1,492,786 Direct labor-hours Setups Part types Expected Activity NO6D MOOK Total 9,060 21,200 30,260 1,570 989 2,559 668 252 920 The manufacturing overhead that would be applied to a unit of product MO9K under the activity-based costing system is closest to: The manufacturing overhead that would be applied to a unit of product MO9K under the activity-based costing system is closest to: Multiple Choice $35.05 O O $76,11 O $45.60 O $12.65 TE
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