Look Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to...
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Accounting
Look 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, N06D and M09K, about which it has provided the following data:
N06D | M09K | |
---|---|---|
Direct materials per unit | $ 26.80 | $ 61.30 |
Direct labor per unit | $ 10.00 | $ 33.00 |
Direct labor-hours per unit | 0.20 | 1.00 |
Annual production (units) | 49,400 | 16,100 |
The company's estimated total manufacturing overhead for the year is $1,294,164 and the company's estimated total direct labor-hours for the year is 25,980.
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 |
---|---|
Supporting direct labor (direct labor-hours) | $ 441,660 |
Setting up machines (setups) | 376,740 |
Parts administration (part types) | 475,764 |
Total | $ 1,294,164 |
Expected Activity | |||
---|---|---|---|
N06D | M09K | Total | |
Direct labor-hours | 9,880 | 16,100 | 25,980 |
Setups | 1,720 | 971 | 2,691 |
Part types | 635 | 332 | 967 |
The manufacturing overhead that would be applied to a unit of product N06D under the company's traditional costing system is closest to: (Round your intermediate calculations to 2 decimal places.)
Multiple Choice
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$9.96
-
$21.49
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$13.48
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$4.95
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