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Upton Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on
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 Direct labor per unit $ 14.20 $ 48.30 $ 16.80 Direct labor-hours per unit Annual production 0.80 57,000 $ 50.40 2.40 12,400 The company's estimated total manufacturing overhead for the year is $3,072,480 and the company's estimated total direct labor-hours for the year is 75,360. 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 Direct labor support (DLHS) Setting up machines (setups) Part administration (part types) Total Estimated Overhead Cost $1,620,000 424,320 1,028,160 $3,072,480 Expected Activity DLHS Long 45,600 Short Total 29,760 75,360 Setups 1,380 1,740 3,120 Part types 1,260 2,820 4,080 Unit overhead cost of Product Short under the activity-based costing system is closest to: Multiple Choice OOOO $203.45. $75.46. $127.99. $172.42
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