90.2K

Verified Solution

Link Copied!

National Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital camcorders.

Model	Annual Sales in Units
High F	11,100
Great P	17,100

National uses a volume-based costing system to apply factory overhead based on direct labor dollars. The unit prime costs of each product were as follows:

	High F			Great P
Direct materials	$	39.10		$	26.50
Direct labor	$	18.70		$	14.30

Budget factory overhead:
Engineering and Design	2,620	engineering hours	$	445,400
Quality Control	13,050	inspection hours		336,700
Machinery	33,930	machine hours		608,940
Miscellaneous Overhead	26,610	direct labor hours		132,550
Total			$	1,523,590

National's controller had been researching activity-based costing and decided to switch to it. A special study determined National's two products have the following budgeted activities:

	High F	Great P
Engineering and design hours	1,070	1,550
Quality control inspection hours	5,750	7,300
Machine hours	20,390	13,540
Labor hours	12,110	14,500

Using activity-based costing, total overhead per unit of Great P model is: (Rounded to the nearest cent.

Multiple Choice

• $48.19.

• $44.85.

• $63.02.

• $170.00.

• $68.15.

Answer & Explanation Solved by verified expert

See Answer