Question
Snavely, Inc., manufactures and sells two products: Product E1 and Product A7. Data concerning the expected production of each product and the expected total direct
Snavely, Inc., manufactures and sells two products: Product E1 and Product A7. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
Expected Production | Direct Labor-Hours Per Unit | Total Direct Labor-Hours | |
Product E1 | 900 | 10.0 | 9,000 |
Product A7 | 600 | 5.0 | 3,000 |
Total direct labor-hours | 12,000 | ||
The direct labor rate is $25.90 per DLH. The direct materials cost per unit for each product is given below:
Direct Materials Cost per Unit | |||
Product E1 | $284.00 | ||
Product A7 | $240.00 | ||
The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated | Expected Activity | |||||
Activity Cost Pools | Activity Measures | Overhead Cost | Product E1 | Product A7 | Total | |
Labor-related | DLHs | $ | 120,900 | 9,000 | 3,000 | 12,000 |
Machine setups | setups | 57,020 | 1,000 | 600 | 1,600 | |
Order size | MHs | 891,840 | 4,000 | 2,600 | 6,600 | |
$ | 1,069,760 | |||||
The activity rate for the Order Size activity cost pool under activity-based costing is closest to:
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