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In activity-based costing, departmental overhead rates are used to apply overhead to products True or False True False Aikman, Inc., manufactures and sells two products: Product 06 and Product 07. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below Direct Total Labor- Direct Expected Hours Labor- ProductionPer Unit Hours 1,800 8,000 Product O6 200 9.0 Product O7 800 10.0 Total direct labor-hours 9,800 The direct labor rate is $17.50 per DLH. The direct materials cost per unit for each product is given below Direct Materials Cost per Unit Product 06 $206.50 Product O7 $162.30 The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Overhead Activity Cost Pools Product 06 Product 07 Total Measures Cost Labor-related $133,770 8,000 9,800 DLHS 1,800 400 Production orders orders 18,501 300 700 Order size MHs 145,180 3,000 3,100 6,100 $297,451 The unit product cost of Product 06 is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $896.71 per unit $637.15 per unit $721.00 per unit $661.45 per unit Appleby, Inc., manufactures and sells two products: Product Q9 and Product V8. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Direct Labor- Total Direct Hours Expected Labor- Per Production Unit Hours Product Q9 800 5.0 4,000 Product V8 1,000 3.0 3,000 Total direct labor-hours 7,000 The direct labor rate is $29.30 per DLH. The direct materials cost per unit is $174.80 for Product Q9 and $168.90 for Product V8 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity overhead Activity Cost Pools Product Q9 Product V8 Total Measures Cost $214,480 41,065 192,700 Labor-related 4,000 3,000 7,000 DLHS Production orders orders 300 200 500 Order size 4,200 4,000 8,200 MHs $448,245 The activity rate for the Order Size activity cost pool under activity-based costing is closest to: Multiple Choice $28.55 per MH $64.04 per MH $23.50 per MH $71.49 per MH

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