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question 38 Cassidy Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based

question 38

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Cassidy 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, VIP and Kommander, about which it has provided the following data: VIP Kommander Direct materials per unit $ 27.50 $ 62.10 Direct labor per unit $ 15. 60 $ 52.00 Direct labor-hours per unit 0.60 2.00 Annual production 43, 200 18, 200 The company's estimated total manufacturing overhead for the year is $4,483,488 and the company's estimated total direct labor-hours for the year is 62,320. 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. Estimated Activities and Activity Measures Overhead Cost Assembling products (DLHs ) $2, 310, 000 Preparing batches (batches) 599, 808 Product support (product variations) 1,573, 680 Total $4, 483, 488 Expected Activity VIP Kommander Total DLHS 25,920 36, 400 62,320 Batches 1, 778 1, 346 3, 124 Product variations 3,072 1, 668 4, 740 Unit overhead cost of Product Kommander under the activity-based costing system is closest to

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