Question 18:

Upton 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, Long and Short, about which it has provided the following data:

	Long				Short
Direct materials per unit	$	14.20			$	48.30
Direct labor per unit	$	16.80			$	50.40
Direct labor-hours per unit		0.80				2.40
Annual production		54,000				11,800

The company's estimated total manufacturing overhead for the year is $3,125,600 and the company's estimated total direct labor-hours for the year is 71,520.

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	Estimated Overhead Cost
Direct labor support (DLHs)		$	1,670,000
Setting up machines (setups)			426,000
Part administration (part types)			1,029,600
Total		$	3,125,600

	Expected Activity
	Long		Short		Total
DLHs	43,200		28,320		71,520
Setups	1,320		1,680		3,000
Part types	1,170		2,730		3,900

Unit overhead cost of Product Short under the activity-based costing system is closest to:

a) 137.33

b) 80.97

c) 185

d) 218.30