Question
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
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 | $ | 15.90 | $ | 47.60 | |||
Direct labor per unit | $ | 18.50 | $ | 52.10 | |||
Direct labor-hours per unit | 0.80 | 2.40 | |||||
Annual production | 45,000 | 10,000 | |||||
The company's estimated total manufacturing overhead for the year is $3,680,400 and the company's estimated total direct labor-hours for the year is 60,000.
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 | |||
Direct labor support (DLHs) | $ | 2,175,200 | ||
Setting up machines (setups) | 463,200 | |||
Part administration (part types) | 1,042,000 | |||
Total | $ | 3,680,400 | ||
Expected Activity | |||||
Long | Short | Total | |||
DLHs | 36,000 | 24,000 | 60,000 | ||
Setups | 1,310 | 2,350 | 3,660 | ||
Part types | 870 | 2,700 | 3,570 | ||
The unit product cost of product Long under the company's traditional costing system is closest to:
Multiple Choice
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$87.01.
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$34.40.
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$63.40.
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$83.47.
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