Problem 3-16A Part 1

Required:
1-a.	Compute the predetermined overhead rate assuming that the company continues to apply manufacturing overhead cost on the basis of direct labor-hours. (Round your answer to 2 decimal places.)

Predetermined overhead rate

$19.00

per DLH

1-b.	Using this rate and other data from the problem, determine the unit product cost of each product. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

	LEC 40	LEC 90
Unit product cost	$45.40	$71.20

Problem 3-16A Part 2

2.	Management is considering using activity-based costing to assign manufacturing overhead cost to products. The activity-based costing system would have the following four activity cost pools:

Activity Cost Pool	Activity Measure	Estimated Overhead Cost
Maintaining parts inventory	Number of part types	$	161,000
Processing purchase orders	Number of purchase orders		80,000
Quality control	Number of tests run		66,000
Machine-related	Machine-hours		681,000
		$	988,000

	Expected Activity
Activity Measure	LEC 40	LEC 90	Total
Number of part types	450	700	1,150
Number of purchase orders	1,600	400	2,000
Number of tests run	700	1,500	2,200
Machine-hours	1,600	10,400	12,000

Determine the activity rate for each of the four activity cost pools. (Round your answers to 2 decimal places.)

Activity Cost Pool	Activity Rate
Maintaining inventory	$140.00	per part type
Processing purchase orders	$40.00	per order
Quality control	$30.00	per test
Machine-related	$57.00	per MH

Problem 3-16A Part 3

3.	Using the activity rates you computed in part (2) above, do the following:

a.

Determine the per unit amount of manufacturing overhead cost that would be assigned to each product using the activity-based costing system. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Manufacturing overhead per unit of LEC 40

Manufacturing overhead per unit of LEC 90

b.	Compute the unit product cost of each product. (Do not round intermediate calculations. Round your final answers to 2 decimal places) Unit product cost for LEC 40 Unit product cost for LEC 90