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Treaster, Inc., manufactures and sells two products: Product J8 and Product G2. Data concerning the expected production of each product and the expected total direct
Treaster, Inc., manufactures and sells two products: Product J8 and Product G2. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Direct LaborTotal Hours Direct Labor- Expected Production Unit Per Hours 8,100 12,000 20,100 Product J8 Product G2 Total direct labor-hours 900 1,000 12.0 The direct labor rate is $26.90 per DLH. The direct materials cost per unit is $217.20 for Product J8 and $139.60 for Product G2 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Estimated Expected Activity Activity Cost Pools Measures Overhead Cost Product J8 Product G2 Total 12,000 20,100 900 7,600 Labor-related Production orders Order size DLHs orders MHS $ 655,059 40,086 711,588 $1,406,733 8,100 500 3,900 400 3,700 The activity rate for the Production Orders activity cost pool under activity-based costing is closest to: Multiple Choice $44.54 per order $185.10 per order $192.32 per order $182.46 per order
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