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Marchan, Inc., manufactures and sells two products: Product K1 and Product S6. Data concerning the expected production of each product and the expected total direct
Marchan, Inc., manufactures and sells two products: Product K1 and Product S6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below fotal Direct Expected Production Direct Labor-Hours Per Unit 0 0 Labor- Hours 4,000 Product K1 Product S6 Total direct labor- 500 hours The company is considering adopting an activity-based costing system with the following activity cost pools activity measures, and expected activity: EstimatedExpected Activity Overhead Product Product Activity Cost Activity Total Pools Labor-related DLHs Production orders General factory MHs Measures Cost K1 $127,485 4,000 400 S6 500 4,500 600 1,000 452,868 4,0003,800 7,800 orders 27,820 $608173 The activity rate for the General Factory activity cost pool under activity-based costing is closest to: O $254.97 per MH $45.73 per MH $135.15 per MH O $58.06 per MH
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