Machuga, Inc

Multiple Choice

Machuga, Inc., manufactures and sells two products: Product C1 and Product M2. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: The direct labor rate is $18.70 per DLH. The direct materials cost per unit is $297.00 for Product C1 and $246.20 for Product M2. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The overhead applied to each unit of Product M2 under activity-based costing is closest to:

A) $1,118.13 per unit
B) $1,013.40 per unit
C) $1,122.22 per unit
D) $647.22 per unit