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Overturf, Inc., manufactures and sells two products: Product Y1 and Product YO. Data concerning the expected production of each product and the expected total direct
Overturf, Inc., manufactures and sells two products: Product Y1 and Product YO. 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- Total Direct Hours Expected Labor- Per Production Unit Hours Product Y1 300 6.0 1,800 Product YO 500 9.0 4,500 6,300 Total direct labor-hours The direct labor rate is $27.50 per DLH. The direct materials cost per unit is $106.10 for Product Y1 and $168.40 for Product YO. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity Estimated Expected Activity Activity overhead Activity Cost Pools Product Y1 Product YO Total Measures Cost Labor-related 151,263 1,800 4,500 6,300 DLHS Production orders orders 43,253 300 400 700 Order size 863,478 MHs 4,900 5,000 9,900 $1,057,994 The activity rate for the Production Orders activity cost pool under activity-based costing is closest to: Multiple Choice $176.22 per order $61.79 per order $172.70 per order $106.87 per order
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