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Item 8 Item 8 Olmo, Inc., manufactures and sells two products: Product...

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Accounting

Item 8

Item 8

Olmo, Inc., manufactures and sells two products: Product K0 and Product H9. The annual production and sales of Product of K0 is 1,000 units and of Product H9 is 1,000 units. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

Activity Cost Pools Activity Measures Estimated Overhead Cost Expected Activity
Product K0 Product H9 Total
Labor-related DLHs $ 549,408 10,000 5,000 15,000
Production orders orders 52,419 1,100 200 1,300
Order size MHs 835,016 2,800 3,200 6,000
$ 1,436,843

The overhead applied to each unit of Product K0 under activity-based costing is closest to:

Vanvalkenburg, Inc., manufactures and sells two products: Product Q5 and Product J0. 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 Q5 Product J0 Total
Labor-related DLHs $ 191,748 3,000 2,800 5,800
Production orders orders 70,536 300 500 800
Order size MHs 295,592 4,300 4,500 8,800
$ 557,876

Forner, Inc., manufactures and sells two products: Product Z1 and Product Z8. 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 Z1 Product Z8 Total
Labor-related DLHs $ 112,190 600 2,000 2,600
Machine setups setups 40,440 500 700 1,200
Order size MHs 609,770 3,000 3,200 6,200
$ 762,400

The activity rate for the Machine Setups activity cost pool under activity-based costing is closest to:

The activity rate for the Production Orders activity cost pool under activity-based costing is closest to:

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