Question
Nole, Incorporated, manufactures and sells two products: Product W8 and Product N0. Data concerning the expected production of each product and the expected total direct
Nole, Incorporated, manufactures and sells two products: Product W8 and Product N0. 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 W8 | 100 | 9.0 | 900 |
Product N0 | 1,000 | 11.0 | 11,000 |
Total direct labor-hours | 11,900 |
The direct labor rate is $17.40 per DLH. The direct materials cost per unit for each product is given below:
Direct Materials Cost per Unit | |
---|---|
Product W8 | $ 176.40 |
Product N0 | $ 280.50 |
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Activity Cost Pools | Activity Measures | Estimated Overhead Cost | Expected Activity | ||
---|---|---|---|---|---|
Product W8 | Product N0 | Total | |||
Labor-related | DLHs | $ 461,720 | 900 | 11,000 | 11,900 |
Machine setups | setups | 25,865 | 300 | 400 | 700 |
Order size | MHs | 796,220 | 4,000 | 4,200 | 8,200 |
$ 1,283,805 |
If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product W8 would be closest to: (Round your intermediate calculations to 2 decimal places.)
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