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Russell Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct

Russell 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, Slow and Fast, about which it has provided the following data:

Slow Fast
Direct materials per unit $ 14.10 $ 43.40
Direct labor per unit $ 3.20 $ 25.60
Direct labor-hours per unit 0.20 1.60
Annual production 38,000 23,000

The company's estimated total manufacturing overhead for the year is $1,686,700 and the company's estimated total direct labor-hours for the year is 44,400. 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
Assembling products (DLHs) $ 800,000
Preparing batches (batches) 402,700
Product support (product variations) 484,000
Total $ 1,686,700

Expected Activity
Slow Fast Total
DLHs 7,600 36,800 44,400
Batches 1,540 1,570 3,110
Product variations 810 780 1,590

The manufacturing overhead that would be applied to a unit of product Slow under the company's traditional costing system is closest to:

Multiple Choice

$21.32.

$3.59.

$13.72.

$7.60.

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